by James Scott
Those who depend on banks for their business finance needs are undoubtedly feeling the pinch as banks are no longer making capital so readily available. The mentality of the micro corporation or sole proprietor is to drive to their local banking institution and grovel at the feet of the banker to acquire a loan or a line of credit, get a second mortgage on their house and put all their assets on the application as collateral so the bank feels comfortable issuing the funding. This works great as long as you have perfect credit and the banks are lending. The reality is, most people and companies don’t qualify for these bank funding options and currently banks are holding onto their money. So what does a company do if they need startup or expansion capital, a stressful question with an easy answer.
Start researching alternative funding like private investors, hedge fund lenders, angel investors, invoice factoring, hard money and the list is endless. There is no reason your business cant acquire the capital it needs with relative ease by seeking out these alternative funding sources. Currently, as private equity firms are closing their doors, a lot of out of work venture capital professionals are opening smaller, more effective organizations that take their substantial international funding contacts and placing them online and charging a membership fee for the entrepreneurs to get unlimited access to them. With this taking place, more companies are getting funding than ever because they are truly getting access to real options to achieve their funding needs. Stay away from banks and look for online finance databases, this is where your company can grab fast and easy funding.
If you’re a small business owner or startup corporation you’re most likely having issues when it comes to raising capital for your company. This is understandable being the financial crisis that traditional lenders are experiencing in the global banking system. Don’t let it get you down because there are 10,000’s of angel investors that are dying to fund your project. While you’re seeing the devastated economy as a bad thing, angel investors are seeing more opportunity than ever before. An angel investor is an individual or group that gets involved with micro investments ranging from as low as $50,000 up to $20,000,000+. They are usually less stringent in their due diligence and other requirements that institutional lenders or venture capital funds. Many times they will take an equity position for their investments while some will suggest a hybrid approach in their proposal which includes equity and debt. Angel investors are more flexible with debt negotiation than large Venture Capital funds and many times they will offer their broad range of expertise with their investment to assist in your company’s growth by way of strategic partnerships, creating invoice factoring relationship to create cash flow and things of that nature. Angel investors really don’t advertise their services on the internet so the best place to find them is on the newer investor databases that have popped up in the past 6 months or so because these newer databases were constructed during this economic crisis and the database development most likely focused on funding sources other than banks. Most of these newer investor databases focus heavily on alternative funding solutions such as angel investors, private investors, factoring, leasing and other non traditional capital sources. Angel investors are truly dying to see your business plan, find the angel investors and get the funding you need.
