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Q: I am in the process of writing a business plan for a hair salon that I want to open in about six months to a year. I’m not exactly sure if I should seek grant money or take out a business loan. Please help.
— A. DaSilva, Montclair, NJ
A: I would definitely consider finding grant money or using other funding alternatives to start your salon before you seek a business loan from a bank. Since banks have strict loan requirements, you usually go that route when your business is up and running, the money is coming in, and you need to finance your growth.
Here are a few financing options worth considering:
The second most common method of funding your startup is finding friends and family members who would be willing to invest in your hair salon.
Microloan programs are worth looking into if you are looking for $35,000 or less. For more information, go to www.sba.gov/financing/sbaloan/micro loans.htm
Another option worth considering is vendor financing. Find a company that produces hair salon products, and make arrangements to borrow money from them. In return, you would be obligated to buy the supplier’s products.
Also, check out www.blackenterprise .com if you want more information. Use the search field and look for stories on “Finding Cash for Your Business.” There is also a link that talks about business plans.