Chicago Business Lawyers Understand Start-up Funding Tough to Score
Chicago business start-ups are finding it tougher these days to secure loans to make entrepreneurial dreams a reality.
Banks have gotten stricter with regard to whom they will grant a loan -- and interest rates can sometimes be prohibitive. Crain's Chicago Business magazine recently details how new business owners are turning to family members to front them the start-up cash - though even this avenue can be closed, as relatives are often pinching their pennies in today's questionable market.
Our Chicago small business lawyers want to point out that despite the tough times, a number of new companies are thriving. What those who do well will tell you is that a burgeoning enterprise with a strong legal foundation has the best chance of success.
The best time to hire a lawyer is long before you start your company. There are highly technical considerations, from corporate formation to structuring your taxes, partnerships and ownership interest. All of this requires an attorney at the outset who can help you avoid some of the common pitfalls.
Secondly, it's important to hire an attorney with experience in small business formation. Hiring an attorney who is simply versed in tax law could result in important considerations that were overlooked or disregarded.
Affordable legal help is a critical investment. And an experienced Chicago small business attorney will be invaluable in the hunt for financing or in executing your startup or expansion plans.
Finance researchers at Pepperdine University recently surveyed nearly 400 privately-held companies and learned that last fall, about 35 percent had tapped friends and/or family for funding. Compare that to just six months earlier, when 56 percent of entrepreneurs reported getting a little help from their friends (and family).
Part of that may be some reluctance to even ask family or friends for a loan, because there may be some fear of not being able to repay them in a timely manner. Other situations involve family or friends who either simply don't have the funds or are reticent to let you borrow it in such uncertain times. And, of course, any such loan should be formalized so that everyone is clear on their legal standing and obligations.
One way you can improve your odds for securing funding is to promote confidence in your service or product. Your chances of success have a lot to do with the viability of your business model.
Also something to keep in mind: You may help your case for a loan if you've already met with a business attorney who can help you iron out the kinks before you make the final pitch to the investor or lender.
Jeremy A. Gibson & Associates is a law firm dedicated to business litigation in Chicago and elsewhere in Illinois. Call 877-452-4529 for a free consultation.