Fiscal foothold: get a leg up by securing stable funding.

• Position: How-To GUIDE

Business owners in Utah can obtain financing from several sources. Commercial and savings banks usually offer business financing, but you might be surprised to know that more and more credit unions are offering business loans at affordable rates.

Financial institutions have restrictions for making loans. Before approaching a financial institution for a loan, try to get a general understanding of its lending requirements, such as debt-to-income ratios and financial history requirements you'll need to meet. The ratios may vary from industry to industry, but financial institutions generally want to see adequate cash flow to cover the loan. Most banks are interested in companies with a proven track record. Credit unions, on the other hand, are generally more willing to give new small businesses a loan.

Understand a few basics before approaching a financial institution for a loan. This may save the time and headache of applying for loans that won't be approved. For businesses that don't qualify for financial institution loans, there are some alternate sources for business capital.

Venture capitalists are usually risk takers. They will invest in a business if they think it has potential. Venture capital firms provide financing and take an equity--or ownership--interest in the business. They may also choose to take a very active part; in running the business.

Angel investors are those who also invest money in exchange for ownership in the business. Usually, financial angels are acquaintances, friends, family members, colleagues or neighbors who are willing to invest in a young company.

For more established businesses, going public is another source of capital. This means selling company stock to the public. It is helpful to understand the entire process of going public before settling on this option. It can be expensive and there are drawbacks. For one, it takes up to six months to complete the process. It can also cost hundreds of thousands for dollars. It is...