There’s no question that this financial crisis and ensuing market meltdown made it tougher than in the past to secure business financing and raise capital. This is especially true for fast-growth companies, which usually consume more resources to feed their growth. If they aren’t careful, they can grow themselves straight out of business.
Amidst every one of the gloom and doom, however, it is critical to keep another thing planned: There are still options available for small business financing. It’s simply a few knowing where to look and the ways to prepare.
Where to Look
There are three main sources it is possible to turn to for small company financing:
Commercial Banks –
These are the first source most owners consider once they think of small enterprise financing. The bank’s loan money that must definitely be repaid with interest and often secured by collateral pledged with the business in the event it can’t repay the loan.
On the positive side, debt is comparatively cheap, especially in today’s low-interest-rate environment. Community banks will often be an excellent starting point for your pursuit of small company financing today, being that they are generally in better finances than big banks. If you do go to a big bank, be sure you talk to someone in the region of the bank that concentrates on business financing and lending.
Keep in mind that it requires more diligence and transparency for smaller businesses as a way to maintain a lending relationship in our credit environment. Most banks have expanded their reporting and recordkeeping requirements considerably and therefore are looking more closely at collateral to make sure businesses are effective at repaying how much cash requested.
Venture Capital Companies –
Unlike banks, which loan money and they are paid interest, growth capital companies are investors who receive …