Attorneys who are skilled in formation of new businesses and have experience working with people in businesses can be an invaluable aid in locating capital for a start up business. The reasons attorney’s can be useful in this process is not only their legal know how, but also their research skills, and contacts. A few of the ways which attorney’s may be able to help in the financing of new business are as follows:
Some businesses require shareholders to come into existence. Attorneys who have incorporated other business’ in the past may know other business owners who are willing to become a shareholder for a nominal fee and a stake in profits. What’s more the lawyer(s) may be familiar with equity investment groups and/or other organizations actively involved in small business financing.
Venture capital investors usually seek out smaller corporations to invest in because of their potential for growth. Attorneys with strong networks in the business field may be aware of venture capitalists and/or investors willing to contribute funds to the newly formed corporation.
Non-Profit and Tax Exempt Corporations:
If a business is started up as a not-for profit, religious or other tax exempt organization it may be eligible for Government subsidizing. Attorneys skilled and knowledgeable in the incorporation process of these types of business may also be able to assist in the government financing process.
Bank loans for small businesses can be complicated and sophisticated. Legal assistance in the application procedure can help iron out important questions the bank may have regarding solvency, collateralization and investment protection criteria in the loan application procedure.
Payment Plans and Pro-Bono Services:
Since the hiring of an attorney often can be a significant expense, those attorneys may be willing to assist in the start up of a new business out of their own interest of getting paid. This interest could take the form of deferred payment, payment plans or even pro-bono services. Talking to an attorney about these things before incorporating or registering a small business may help in determining if the lawyer(s) and/or law firm is willing to provide any type of assistance in the matter.
There are many sources of financing, some of which are more difficult to locate than others. Corporate attorneys who know about start up businesses and financing of these businesses may also have knowledge of alternative financing sources for new businesses as the start up costs for such businesses are often considerable. For example, the lawyer(s) may be knowledgeable of the United States Small Business Administration programs available to new business owners and may be able to assist in obtaining financing from that program and others like it.
Attorneys are more than just the people who help new business owners file paperwork and register companies. They are also skilled and knowledgeable persons who in some cases have great experience and ability in the business field. Adept, connected and experienced attorneys may possess the key that will enable a business owner to follow his or her dream and not only form the right kind of company but obtain the right kind of financing.