Startup Finances

Funding your business

Starting a business can be expensive. But there are resources such as grants and low-cost loans to help you finance your business. Be sure that you plan and save enough cash to to operate  your business for at least the first two months. This may include the amount of money you need to cover your startup expenses such as buying equipment as well as permit or license fees. It may take time to set up before you have enough customers to be profitable.

Using the calculations and estimates from your business plan, decide if you have enough money to begin, or if you need additional capital first. Lenders want to see that you have some of your own capital invested in your business. 

Financial Projections: You will need financial projections for at least the first three years of operation including a forecast of future sales and the costs to run your business. 

Funding Options

Loans

 There are many types of loans available to business owners such as SBA loans, Term loans and equipment financing loans

• Maryland Opportunity Zone Program is a nationwide initiative administered by the U.S. Treasury created under the 2017 Tax Cuts and Job​s Act. The program provides federal tax incentives for investment in underserved communities over the next 10 years. Areas designated as Opportunity Zones will be able to reap the benefits of new capital investment to help redevelop underserved communities. 
  
  
• The Baltimore Development Corporation (BDC) has several different loan programs to assist businesses with financing for capital projects, working capital, business acquisition, leasehold improvements, and purchase of furniture, fixtures, machinery & equipment. A notable program managed by BDC is the State of Maryland Enterprise Zone (EZ) program. The EZ program provides real property and state income tax credits for businesses located in a Maryland enterprise zone in return for job creation and investments. Businesses located in Focus Areas, which are specific boundaries of an EZ, may also qualify for personal property tax credits on new investments in personal property and enhanced income tax credits for creating new jobs.
  
  
• The Latino Economic Development Center are a CDFI, therefore they offer affordable small business loans from $500 to $250,000  and operate other business services. Learn more about LEDC's services here under Baltimore City food business assistance resources.
  
  

• The Neighborhood Impact Investment Fund through Baltimore Development Corporation (BDC) is a mission-driven investment fund dedicated to delivering capital and promoting inclusive, equitable growth in Baltimore’s historically disinvested neighborhoods. This initiative is intended to support communities through loans and investments that can accelerate community revitalization, catalyze business activity and provide greater economic opportunity for residents. To find out if your food business project is eligible, visit the tool here. 

Grants

The Baltimore Development Corporation offers a Facade Improvement Grant that provides funds to make exterior improvements to commercial and industrial properties. The grants are to be used to enhance the appearance of individual building façades, signs and awnings, and other exterior improvements. Both businesses and property owners are eligible

Investments

Business owners may pursue investment opportunities to cover startup costs. In addition to money, investors may provide other assistance such as marketing, public relations and financial planning.

• The Neighborhood Impact Investment Fund is a mission-driven investment fund dedicated to delivering capital and promoting inclusive, equitable growth in Baltimore’s historically disinvested neighborhoods. This initiative is intended to support communities through loans and investments that can accelerate community revitalization, catalyze business activity and provide greater economic opportunity for residents.
  
  
• Downtown Baltimore is the largest economic engine in the city, generating more than $122 million in property taxes, 85% of hotel taxes, 75% of parking taxes, and 16% of all income taxes collected by the City. To keep this engine humming, we provide research-driven initiatives that foster development and track Downtown’s economic progress.
  
  
• The Food Lenders Network, a national network of over 20 mission-driven lenders focused on creating a more just, equitable and resilient food system, announces the launch of its new website. Created in 2021 by Self-Help and Reinvestment Fund, with support from W.K. Kellogg Foundation, the practitioner network fosters collaboration between lenders to improve access to capital for food system businesses across the food supply chain.

Crowdfunding

Crowdfunding is the process of raising funds for a business from a large number of people, called crowdfunders. Crowdfunders aren’t technically investors, because they don’t receive a share of ownership in the business and don’t expect a financial return on their money. Instead, crowdfunders expect to get a “gift” from your company as thanks for their contribution. Often, that gift is the product you plan to sell or other special perks, like meeting the business owner or being acknowledged somehow.

Crowdfunding is a popular option for people since it helps build awareness and potential customers. Crowdfunding is also popular because it’s very low risk for business owners. However, there could be risks and obligations if the business does not succeed. Every crowdfunding platform is different, so make sure to read the fine print and understand your full financial and legal obligations.

Other funding

Many banks will also give loans to small businesses. Loans may be used to buy commercial kitchen appliances, flatware, furniture, and other items needed to run the business. The requirements for these loans may be more demanding and interest rates may also be higher.We encourage you to contact your bank for current rates and terms.