Assuming you don't have a ready line of credit, an expansive bank manager, wealthy relatives or a substantial stash of retirement savings you're willing to risk, you're going to have to do some serious homework and legwork. Fortunately, there are a number of sources of finance for the fledgling small business entrepreneur, at least one of which may be right for you.

SBA LOANS

Available only to U.S.-based businesses (but look for similar programs in your own country if you're outside the U.S.), the SBA (the U.S. Small Business Administration) has assisted thousands of entrepreneurs start their own small businesses. The SBA doesn't issue grants (money you don't have to pay back) or make loans directly, rather, it guarantees loans made by private lenders thereby reducing or eliminating the risk inherent in new business ventures and making lenders more willing to lend.

The primary consideration for the SBA is repayment ability from the cashflow of the business as well as "good character, management capability, collateral and owner's equity". You will be expected to personally guarantee your loan. This means your personal assets are at risk.

As for the types of businesses eligible for SBA loans, the SBA imposes the following criteria: the business must be "for-profit" (all that means is that your business has a profit motive, not that it has actually generated a profit yet), be engaged in business in the United States, there must be "reasonable" owner equity (what's reasonable will depend on the circumstances) and you are expected to use alternative financial resources first, including your own assets where practicable.

The SBA also imposes limitations on the use of loan proceeds. For example, although the proceeds can be used for most business purposes (the examples given by the SBA include "the purchase of real estate to house the business operations; construction, renovation or leasehold improvements; acquisition of furniture, fixtures, machinery and equipment; purchase of inventory; and working capital"), you can't use the loan proceeds for financing floor plan needs, to pay existing debt, to make payments to the business owners or to pay delinquent taxes etc.

As a general rule, loans for working capital must be repaid within seven years and loans for fixed assets must be paid for by the end of the economic life of the assets (but not to exceed 25 years).

Interest rates are negotiated between the borrower and the lender but the SBA imposes maxima which are pegged to the

Prime Rate.

Finally, the SBA charges lenders a guaranty and servicing fee for each loan approved, and there is nothing preventing the lender oncharging these fees to the borrower. The guaranty fee for a loan of $150,000 or less is 2% of the guaranteed amount; over $150,000 but below $700,000, it's 3% and above $700,000 it's 3.5%. The annual servicing fee is 0.5% which is calculated on the then-current loan balance.

Where the borrower meets the SBA's credit and eligibility requirements, it will guarantee up to $85% of loans $150,000 and less and up to 75% of loans above that amount (up to a maximum of $1,000,000).

For more information about the various SBA loan programs, visit the SBA website at .

PRIVATE GRANTS

At present, there are no U.S. government grants offered for small business. If you're outside the U.S. check with your own government about the availability of small business grants. You never know!