BUSINESS SENSE
“Find Your Funding Source” – Week 15
Nancy Larsen, Enterprise Facilitator of SEFP

There are banks that offer commercial finance, which are normally renewable short-term loans for capital needs of a business. Qualifying for this type of capital typically involves a business plan including financials showing a cash flow and repayment of the debt, the pledging of some form of asset or equity, and many times personal guarantees.

Venture Capital (VC) normally invests $250,000 or more in industries and businesses that exhibit extremely high growth potential. If you fit the profile, searching for the right investor for your business can be detrimental to the business success and longevity.

There are sources of capital advertised via the Internet but use caution in jumping into this relationship until after research is done on the stability of each opportun-ity. Using credit cards is done to capitalize businesses but should be done in the short-term only! In other words, if you cannot pay off the credit card within a year you become a slave to this high interest rate credit.

If equipment acquisition is a major part of your need for business capital there are equipment finance and leasing sources too. Whichever funding source works with you is a good funding source but of course, you have commitments to keep this relationship healthy.

Remember – “Looking for money is like searching for the Holy Grail. It would be easier if someone told you where it was.”

Next weeks topic is: “Negotiating Your Deal”

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