How To Finance Your Business Without A Business Plan

Those of you who've been readers for a while may know that I have a sort of love-hate relationship with business plans. On the one hand, they are the product of an essential business activity—planning. What happens all too often, though, is that entrepreneurs end up working on their business plan when they should be working on their business. They end up in "analysis paralysis", trying to get things "right", all the while failing to realize that it's impossible to get things "right" because you are trying to predict the future. As Winston Churchill once said, "Plans are worthless. Planning is invaluable."

But love 'em or hate 'em, business plans have been a necessary evil for any entrepreneur looking for capital outside his own pocketbook and immediate friends and family. Investors and creditors, understandably so, typically want a very clear picture of exactly what's going to happen with their money.

This picture is changing, though, for smaller loans under $100,000. Small Business Guide Darrell Zahorsky explains:

"The relationship-based banking in the small loans and credit market is becoming irrelevant. The decision of loan approval is determined by a computerized credit scoring program unless a business requires a loan or credit product over $100,000."

So if you're looking for under $100K, and you haven't maxed out all your credit cards already (that will throw your scores down), you may be able to save yourself valuable time and money by just applying for the loan without a formal business plan.

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