Business Planning & Financing

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If you have checked out our Starting a Business page, you know that there are many steps to starting a business. While it is not possible to start a business risk-free, there are many free, high-quality resources available to aspiring business owners to lower the risk and increase the chances of success.

Business Planning Resources

Located in the heart of Silicon Valley, Redwood City is uniquely nestled among fantastic resources for free business planning help.


My Own Business Institute (MOBI)	San Mateo Small Business Development Center	Renaissance Entrepreneurship Center

SCORE	The Acceleration Project	ESO Ventures


	Centro Community Partners

Business Financing Resources

When it comes to financing a business, only 25% of applications for small business loans at traditional bank are approved. That means if you are looking for small business financing, the bank you bank with may not be your best option! This is true for businesses which are looking to start and those who are looking to expand. Most financing takes several weeks to several months (30-120 days) to secure. Plan ahead as you write your business plan and start thinking about financing early.

We highly recommend reaching out to the Small Business Development Center, sponsored by the US Small Business Administration or another organization for support in choosing your best financing partner based on your business plan, your business needs, and your own credit worthiness.

Below is a review of different types of financing options; expand the links to learn more about each option’s lending strategy and learn how you can build your business creditworthiness.

Loans from Traditional Banks

Traditional banks may be able to give you credit to start your business if you have a lot of personal assets to leverage and very good credit. If lending to a new venture, they will want to see a business plan and proof of concept, i.e. evidence that you have a market and a sales strategy that will help you repay the loan. Typically, having a longer banking relationship with these institutions, both with personal banking and business banking, will be beneficial. In fact, many of these lenders will only loan to businesses who have been operating for 2+ years. A few common banks to explore if this description fits you: Bank of America, Chase, Wells Fargo, US Bank, BMO, Cathay Bank, but there are many more.

If you are not sure where to start, contact the San Mateo Small Business Development Center or another organization listed above to receive no-cost help in navigating your financing options.

Loans from Credit Unions or Community Banks

Loans from Community Development Finance Institutions

Community Development Finance Institutions (CDFIs) are often a better choice for smaller loan amounts and/or business owners with fewer personal assets or worse credit scores. CDFIs are non-profit organizations funded by the US Department of the Treasury to make investments in communities. CDFIs often lend to business owners that large banks often do not, due to a higher risk profile (shorter credit histories, fewer assets to pay back the loan in case of failure) or cost of management (smaller loan amounts require the same amount of work but with less payoff). CDFIs still evaluate risk and will want to see a business plan, but they also work with business owners to remedy credit problems, build business management knowledge and ensure successful business launches or growth strategies. A few local CDFIs to check out include: Working Solutions, TMC Community Capital, Fondo Adelante, Pacific Community Ventures, Accion Opportunity Fund, and ICA Fund.

Venture Capital

Venture capital is generally used to support startups and other businesses with the potential for substantial and rapid growth (often technology or biotechnology). VC firms raise money from limited partners to invest in promising startups or even larger venture funds. There are typically three stages for gaining investment from VC funds:

Pre-seed stage, usually funded by an “angel investor”, for product development, market research, and even business plan development

Seed stage, usually with funds known as “Series A”, for hiring, marketing and operations once the product from the pre-seed stage is viable

Late stage, usually funded by private equity or hedge funds, for proven businesses which are still expanding and starting to generate profits

Alternative Methods

Even with a great business plan, many banks and even many CDFIs will not make startup loans to businesses. They will want to see that the business has a proven customer base, is making sales, and is managing its growth sensibly. But what about the business owners who need capital to make the first investments in products or raw materials? Or who need to pay rent or renovate a space to do their business? The following options may be better:

Lending Circles – Organizations like Mission Asset Fund and Peninsula Family Service facilitate lending circles, which can help you build credit and save money. Lending circles, known as tandas in Mexico or hui in East Asia, are a traditional way of saving money. The individual pays into the lending circle some amount per month for a set period of time, and periodically gets the depending on the size of the circle, gets the monthly amount from the whole membership.

Crowdfunding – Organizations like Kickstarter, Kiva, or GoFundMe may be good options for the new entrepreneur if there’s a good story, an early proof of concept or a compelling reason to invest (for example, a great “prize” to early investors). This is often a great opportunity for a business owner to test their marketing skills and elevator pitch; the best campaigns are advertised widely, using a variety of marketing strategies and channels.

Friends and Family – While this may not be an option for all entrepreneurs, friends and family are often the first investors in new entrepreneurs’ ventures. But a piece of advice? Treat your friends and family as though they were strangers; sign a contract that outlines when and how you will pay them back.

How to Build Credit as an Entrepreneur

Most early-stage business owners have to leverage their personal assets (“self-funding”) to start the business – but it is best not to think of this as personal money! Business owners should open a business account as soon as possible and begin using it for business expenses, in order to begin building your business credit. This applies even if you are self-funding the business. Get into the habit of transferring it to the business account and treating it as “separate” money, rather than commingling it with your personal finances. When you have registered your business, you should also register for a D-U-N-S number, issued by Duns & Bradstreet, an organization that functions similarly to a credit bureau, but for business.

If you have poor personal credit, it is best to correct it earlier in your entrepreneurial journey than later. There are many local resources available to correct your personal credit. See our Economic Mobility Pages on Financial Empowerment for more information.