Top 5 Business Structure Essentials for Successful Funding

What’s going on guys?! Are you ready to take the leap and secure funding for your business? I'm about to walk you through the top five elements you need to have in place for a smooth funding journey. If you have been curious about what it takes to get approved, keep reading. Getting these right can be the difference between a 'yes' and a 'no' from lenders. Let’s talk about it!

1. Choosing the Right Entity: Your Business's Identity Card

First up, let's talk about your business entity. This is like picking the right outfit for a job interview – it says a lot about you. Are you a sole proprietor, a partnership, or maybe an LLC? Your choice here affects not just how much tax you pay, but also how much risk you're willing to take and, importantly, how lenders view you. LLCs and corporations often have an easier time getting funding because they show you're serious about your business game. It’s about putting your best foot forward.

2. A Professional Address: Business Location is Everything

Your business address is more than just where you get your mail. 

It’s a signal to lenders that you have a stable base of operations. Using a P.O. box or your home address might work in the early days, but having a dedicated business address adds a layer of professionalism. This doesn’t mean you need a fancy office from day one – it’s easy and affordable to register with a virtual office or even a sign-up for a shared workspace.

Keep in mind, that a dedicated business address can also enhance your brand's credibility with customers, suppliers, and partners. Having a physical address or even a well-respected virtual office location can provide a sense of trust and legitimacy that’s invaluable, especially when you're looking to expand your business and establish new relationships. Remember, the image you project in business can often be as impactful as your actual products or services!

3. Get Digital: Email & Website

Listen, in today’s world it’s almost as if you’re not online, do you even exist? You know what I’m talking about, don’t you? A professional email address and website are non-negotiables. Your email shouldn't be an old one from college. Go for something that’s [YourName]@[YourBusiness].com.

Your website is also really important. It’s basically like your digital storefront AND billboard.  It doesn’t have to be overly fancy, but it should be clear, navigable, and reflective of your brand. This is where potential funders will go to check you out, so make sure it makes a great first impression.

If all of this feels overwhelming, you’re in luck — there are tons of web designers out there who can help you plan, design, and launch a website on your new domain name!

4. Picking a Non-Restricted Industry

The business industry you choose says A LOT to banks. Some industries are a no-go for many lenders due to high risks or ethical concerns (think gambling or tobacco). If you’re in a non-restricted industry, you’re already a step ahead in the funding game. If you are in a tricky industry, don’t stress too much – there are easy ways to get funding that don’t include having to search for specialized options. This is where your business entity comes into play again!

With an LLC, you can easily set up a holding company which your restricted industry business belongs to. Think of it like a funding umbrella: your holding company receives funding and it trickles down into the company you operate. Working with a funding specialist who will help you structure your business is key to making this plan successful.

5. Business Bank Account

Last but definitely not least, you need a business bank account. It is SO important to keep your business and personal finances separate. You need to be able to show your business expenses completely separate from your personal expenses. A separate business account not only makes your financial management cleaner but also impresses lenders. It shows you’re managing your business like a pro. If you aren’t sure where to start, give your current bank or credit union if they offer business accounts! Almost all of them do, and starting with an existing relationship opens many doors.

The Takeaway

In conclusion, if you are looking to ask banks for funding for your business, these elements are key! They might seem basic, but they’re the foundation of your funding journey. Get these right, and you’re setting yourself up for a smoother ride to securing that much-needed funding. It’s all about being prepared, looking the part, and showing lenders you mean business!