Business stages and loan needs Your company's place on the business life cycle will help determine the type of loan you need.
Seed money is used for initial planning.
This is where you would do market research and create a business plan. Start-up funds, used to get going in business, can vary greatly. A desktop publishing company initially may require only a computer, software, printer and fax, but a new restaurant would need to lease or buy a lot of physical equipment and a location. This phase may be financed by the owner or a commercial lender. Banks and commercial finance companies are less likely to lend to start-ups unless there is a significant amount of collateral pledged by the owner.