Financing Your Business
Every business needs capital at some point to start up or expand. Typically, this comes from savings, home equity, or friends and family. The next most frequent source of funding is to look for some kind of business loan. Find federal, state and local governments financing programs to help you start and grow your operation.
Getting Loans and Financial Assistance
Commercial Financial Institutions
The best chances for obtaining commercial loans are through in-country financial institutions or their overseas branch offices or affiliates with which a business already has an account and/or relationship. CalBIS does not provide guidance on obtaining commercial loans; however, CalBIS can assist companies in identifying California offices of foreign financial institutions.
The benefits, risks, sources and guides to obtaining venture capital are widely documented. For starters, a great amount of information can be found at a local bookstore about the possibilities, application processes, and publications that list sources of venture capital. CalBIS does not provide guidance on obtaining venture capital.
Several state-sponsored financial assistance programs are available to firms locating, expanding or modernizing facilities in California. The types of assistance available can be grouped into three broad categories:
Business financing is provided directly to companies in order to undertake various projects. Each program has its own specific requirements for qualification and terms for approval. Financing is available in the form of industrial development bonds, small business loan guarantees and export finance loan guarantees, among others.
Environmental loans reflect California’s commitment to the preservation of the environment. The state has implemented various loan programs to help companies clean up the environment and implement environmentally friendly programs. The loan proceeds are used for such things as replacing or upgrading underground petroleum tanks, reducing hazardous waste and recycling.
Public infrastructure financing
Public infrastructure financing provides financial assistance to cities and counties for public infrastructure projects. Although not directly available to individual businesses, cities and counties can obtain public infrastructure financing that benefits qualified businesses locating in their areas.
California Small Business Loan Guarantee
The Small Business Loan Guarantee Program allows a business to not only acquire a loan it could not otherwise obtain, but to establish a favorable credit history with a lender so that the business may obtain future financing on its own.
Any small business as defined by the U.S Small Business Administration (typically businesses that employ one hundred people or less).
Proceeds must be used primarily in California and for any standard business purpose beneficial to the applicant’s business, such as expansion into new facilities or purchase of new equipment.
Opening a Bank Account
To open a bank account in California, a company or individual might want to consider opening an account at a bank in the home country that has affiliated branches in California. Although new California accounts will most likely require the same documentation whether affiliated with a foreign bank or not, having an account at the same bank in the home country may facilitate the process of opening an account in California.
To open a company bank account, the company must first register to conduct business in California and obtain file-stamped copies of the registration papers (see Part 2 of this document, Defining and Registering Business Entities). Once registered, an authorized company representative would go to see a new accounts officer at the bank where the company wishes to open an account. Documents required to open an account for a firm include all three categories of the following:
- Fictitious business name statement, where applicable (See Registering a Fictitious Business Name);
- Employer Identification Number (EIN) (See Registering for Business Taxes, U.S. Federal Government); and,
- File-stamped copies plus copy certification from the Secretary of State validating that the company is registered to conduct business in California. Note: Certificates of Registration or Qualification may also be included.
To open an individual account in California, the new accounts officer will ask for a taxpayer identification number. This will be either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). These can be obtained free of charge from the Social Security Administration.
Lawfully admitted aliens with Immigration and Naturalization Service (INS) permission to work in the United States will need a Social Security Number (SSN). The Social Security Administration (SSA) has a new process for non-citizens to apply for Social Security number (SSN) cards as part of the immigration process. Now, people age 18 and older applying for immigrant visas with the U.S. Department of State can also apply for SSN cards at the same time.
If the individual requested a Social Security number card as part of the visa application and is age 18 or older when arrived in the United States, the information needed to issue a card will be shared with the U.S. Department of State and the U.S. Department of Homeland Security. The individual does not need to fill out a special application or go to a Social Security office. The Social Security Administration will assign the individual a number and mail the Social Security card to the U.S. mailing address where the Department of Homeland Security will send the individual’s Permanent Resident card. The card should be received within 3 weeks. If the individual does not receive it, and/or the mailing address has changed, call the Social Security Administration. The Administration will provide the Department of Homeland Security and the Department of State with the number assigned to that individual.
If the individual did not request a Social Security number card as part of the visa application or is under age 18 when arriving in the United States, the individual must apply for a card at a Social Security office and should call to find out where to apply once a permanent address is established. When visiting a Social Security office to apply for a Social Security card, the individual will need his or her passport or travel document, Permanent Resident Card (Form I-551), if received, and a birth certificate for each family member applying for a number. A Social Security representative will help the individual complete the application.
Complete instructions are available on the Social Security Administration’s website at: http://www.socialsecurity.gov/ssnvisa/.
Those who do not meet the requirements to obtain a SSN may apply for an Individual Taxpayer Identification Number (ITIN) by completing the Application for IRS Individual Taxpayer Identification Number (Form W-7) and submitting it to the nearest SSA office.
For additional information or to obtain or submit forms, consult the SSA:
Social Security Administration
Toll-free telephone within the United States: (800) 772-1213
Social Security Administration offices
Website listing: http://www.socialsecurity.gov/
Individuals living outside of the United States should check the list of offices for the one to contact at http://www.socialsecurity.gov/foreign/index.html.
Forms and References