The primary source of capital for most new businesses comes from savings and other forms of personal resources. While credit cards are often used to finance business needs, there may be better options available, even for very small loans. Often, money is loaned interest free or at a low interest rate, which can be beneficial when getting started. It is often said that small business people have a difficult time borrowing money. This is not necessarily true.
Banks make money by lending money.
However, the inexperience of many small business owners in financial matters often prompts banks to deny loan requests. Requesting a loan when you are not properly prepared sends a negative signal to your lender. To be successful in obtaining a loan, you must be prepared and organized. You must know exactly how much money you need, why you need it, and how you will pay it back. You must be able to convince your lender that you are a good credit risk.