Tuscarawas County Auditor’s Office

New Business Guide

Obtaining Loans & Capital

One of the most important issues which face new and existing businesses is how to obtain cash for the creation or expansion of a business. One of the most common errors in starting a business is that of being undercapitalized or under funded when starting the business. Depending on the type of entity you are, and the size of your business (or what you expect it to be), having the wherewithal to obtain debt or capital is extremely important. The following is a general discussion centering on some of the historic manners that businesses in Tuscarawas County have obtained loans for business use.

• Bank loans and lines of credit – This is the most common way of obtaining extra cash in order to expand your business or to make up for temporary cash shortages. Secured and unsecured loans are available to businesses, as well as lines of credit (this like a credit card for a business). Of utmost importance are the facts that you need to establish a positive relationship with a local financial institution and secondarily that these monies have to be re-paid to the institution in the future.
• Small Business Administration (SBA) – Loans B SBA loans are administered by the federal government as a lower interest, lower cost way of financing new or growing businesses in the United States. Such loans are normally still underwritten by a local financial institution and professionals often provide low or no cost technical assistance to the owners of the business so that the business can eventually generate the funds to repay the loan. There are normally fees associated with being in the program. The paperwork in obtaining such a loan can be monumental, but a strong professional and a good banker should be able to assist you.
• Taking on Partners/Shareholders – Probably one of the least acceptable methods to those beginning a new business, accepting another owner or selling stock of your corporation can be a way to generate capital (cash) which will not have to be repaid (such as with a loan). However, a new owner also takes part of the profits when making money or part of the loss, as well as the fact that they may desire a say in management decisions and the operations of your business.

These are just some of the more common methods of obtaining capital. We feel that of utmost importance is to establish a positive relationship with a financial institution, a banker and a professional now. By doing so, if you choose to try and obtain a loan or capital financing in the future, you will have established contacts already in place and they should be able to expedite your loan process. Either way, your capital and debt related needs should be reviewed annually with a professional business advisor.

Below are the numbers of local area chambers of commerce who may be able to refer you to bankers or tell you more information about loans, subsidized or unsubsidized grants & loans or other opportunities and businesses:

Tuscarawas County Chamber of Commerce	330-343-4474
Twin City Chamber of Commerce	740-922-5623
Newcomerstown Chamber of Commerce	740-498-7244