SOURCE: New Business Funders

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June 13, 2016 00:41 ET

The 5 Common Myths About Business Start-up Funding

SCOTTSDALE, AZ--(Marketwired - June 13, 2016) - New Business Funders (http://www.NewBusinessFunders.com) is helping start-ups debunk the most common myths about start-up funding. Founding and funding a start-up business is challenging enough. But add to that the myths or "conventional wisdom" that are ill-advised or just plain wrong. With capital markets undergoing changes and new funding sources opening up, there is no need to "pile-on" misinformation.

New Business Funding, LLC helps entrepreneurs traverse the sometimes complicated process of getting start-up funding. According to its founder, Troy Bohlke, "The financial world is rapidly changing. There are more new opportunities for funding than ever before. But many are confused about the realities of the process. Our goal is to dispel myths and disinformation that complicate and confuse the process."

New Business Funding has identified some of the more common myths entrepreneurs have about funding to help debunk them once and for all.

Myth #1: "I need a bank loan, angel investor or venture capital to raise start-up funds." First of all, a bank has little interest in start-ups because they perceive the risk to be too high. A start-up has no revenue, assets or other types of collateral that a bank is seeking to reduce risk.

Other types of investors are available, but are losing traction. The angel investor or venture capitalist will likely want a significant portion of the company. But there are new ways of funding now available.

Myth #2: "All I need is a great idea." Sorry to say, but ideas are plentiful and cheap. The ability to implement a good to fair idea is more important than a great idea sitting on a shelf. Also, testing in the marketplace is essential to proving the validity of your idea. The market is the ultimate litmus test. But the time and cost to actually implement it is the next big hurdle.

Myth #3: "I will never personally guarantee a loan." The reality is that most investors are looking for some back-up plan if the business doesn't meet expectations or fails. A personal guarantee may be the only way to get funding. Besides, who else believes in your business other than you.

Myth #4: "I need a detailed business plan." Preparing a complete business plan is time consuming and expensive. Besides, everyone knows the projections won't hold up after the first 30 days. And with increasingly dynamic markets, the need for agility and change of direction is important. The smart people know that a well-formulated concept that's outline on one page is more important than a 50-page plan. And they also know that the person who is running the business is more important than anything else when predicting success.

Myth #5: "We need only 6 months to grow revenues to operate the company." Remember, things will take more time than anticipated and they will cost more, too. A start-up is not easy or quick. So plan accordingly; and back-up plan, even more so.

For more information on what it really takes to get start-up funding, please call New Business Funders, LLC at 1-855-680-3426 or email funding@newbusinessfunders.com.

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