Who may apply and what are conditions?

Any entrepreneur may apply for entering an incubator program on condition that his business project is viable or his business has great potential. An necessary condition is that applicant must have a business plan containing relevant information.

There are also specific conditions and requirements for admission into such programs that vary from case to case, usually referring to business industry, business location, for-profit/non-profit strategy of businesses or financing means.

Programs usually last up to three years.

Advantages and disadvantages of resorting to a business incubator

On one hand, business incubators provide:

• financing, without requiring
• customized professional assistance
• entrepreneurial training
• economical access to facilities
• inexpensive business services
• opportunities for entrepreneurs to connect with people who can promote business growth and profits
• a forum for exchange of ideas among entrepreneurs

On other hand, there may be some inconveniences too with business incubators. For instance, with incubators that have goal of gaining a profit, necessary agreement to be reached upon can be most of times a very cumbersome one for most firms.

Also, with non-profit incubators sponsored by governments there is tendency to favor high tech startups that plan for rapid growth (as thus they will create more jobs) rather than more traditional businesses.

However, business incubators may be a very helpful opportunity to start your business; they can constitute a real boost for a beginner business.

Laura Ciocan writes for http://www.businessplanning.ws where you can find more information about what is a business plan

Your level of commitment to company will be reviewed; for example, how much equity have you put into company?

If your company cannot repay its debt, bank will evaluate what secondary source of payment is; this can include security such as businesses assets that can be liquidated, personal guarantees and/or other sources of income.

Give lender sufficient lead time to review request, particularly if you are new to financial institution. It can take some time to review all information, often clarification is needed and business may need to be visited before any financing is approved. As well, most often request needs to be referred to institution's risk management for review.

A good business plan is important, but keep it concise and don't overdo it on documentation. The cash flow and balance sheet are of particular importance. Before preparing final draft of plan you may want to set up a preliminary appointment with a financial institution, be prepared to answer questions such as: how much money is being requested, why, what terms are you looking for, what are your alternative sources of repayment?

The reality is that banks are conservative lenders and will try to mitigate most or all of risk away. At very least you will probably have to provide a personal guarantee to some percentage of total outstanding amount borrowed.

Fees are a fact of business financing, you can negotiate and may get some reduction (in fact you should always try), but lenders are not in business of losing money. Interest rates are based on type of loan, perceived risk of business and financing and security being held in support of loan.