What's the best way to secure funds to open a business?

We really have a wonderful idea for a business (especially given the market in this city), but we do not personally have the finances to open it.

We both have fair to horrible credit, so it seems that a personal "loan" is out of the question. It also seems that Small Business Administration Start-Up Loans are based off of personal credit, so that also seems to be out of the question.

After considering the costs and working on a business plan (this is still being worked on), I think we could probably get away considerably well with about $50,000-$60,000. I don't mind working with a venture capitalist or an angel investor, but at the same time, I don't want to give away a huge chunk of the business's profits just for someone to guarantee a loan because then the situation will be just like working for someone else (and that's what we want to get away from).

Any suggestions? I'm out of ideas at this point. =/

Go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to review your business plan and discuss various loan options available to you.

SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).

SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.

you should talk several people with your proposal. Perhaps somebody will be ready to invest .

You best bet would be to find as many venture capitalists & angel investors and go through a interview type process with them. Find out what stipulations each of them has and then choose one that will work with your situation.
You have to do a bit of sacrificing in the beginning, but in time will reach the point where you can go it alone. And essentially that's what it's all about. Just have to do what you have to do until that time.
Good Luck!

Before you start soliciting for private investment, look into SBA (Small Business Administration). They have resources that can help with finding you the necessary funds to start a business.

First of all - CONGRATULATIONS!!!
May I suggest a book? Loral Langemeier's The Millionaire Maker's CashMachine. It shows how others built businesses from practically nothing and how you can too. I loved this book and started my own business because of it. I was completely unable to get financing then but did it anyway.
Some of the ways I found funding - family (I hate this one) but we offered my father in law a great return (15%) if he would let us use his home equity. He had a house that was paid for and empty. We offered to be the property managers/renting it out/sending him the rent - if he would take out a home equity loan that we would be completely resposible for.
Depending on your time table and skills you could become a birddog for a real estate investor. You find the distressed estates and get a finders fee if they close on it. Usually $500 per find. This is time consuming but you build relationships with investors while earning an extra $500 for your business.
(I had great luck with for sale by owners signs)
HARD MONEY LENDERS - they can be found in the newpaper usually under money lending. These are usually paid back quickly and have very high points/interest. But you wouldn't be giving up any ownership.
Or...My husband has a fabulous business idea and we want about $100k - but are in the same position (except our credit is excellent). However, I've discovered a home business that will easily make me $20k a month. It's insane! But we've just decided to use this business as a vehicle to pay for the other. I'm loving it so much (and who doesn't love making lots of money) that I'll continue but my husband will break off and start his this summer when we have the funds (in cash) to start it.
GOOD LUCK.
If you'd like to hear what I do email me ruthsbusiness@yahoo.com
Otherwise - use your library! It has shelves of books on the topic of raising money for business.

For startups and new businesses, I would recommend

http://www.angelbusinessloans.com

VCs or Angels won't talk to you since you need a small loan. And you are right about the SBA.