Sources of Capital for New, Start-up Businesses by Joseph Lizio

As the economy continues to face credit challenges, small businesses, especially new, start-up companies are finding it even more difficult to find the capital they need to take their ideas and concepts and turn them into viable businesses.


Private equity firms and angel groups are no longer actively seeking new investments. They are more concerned with preserving and protecting their current portfolios. Further, private investors, like your neighbor or local doctors, accounts, lawyers, are not investing in local companies as their investments and retirement portfolios (usually the main source of their investment capital) have taken such large hits that any new investments are just out of the question.

Bootstrapping, by far the greatest source of capital for new businesses, is drying up fast. Credit card issuers and backers are pulling programs, tightening approvals and reducing limits. Friends and families are struggling just to survive themselves and do not have the disposable income to investment in your company.

Taking loans from retirement accounts are nearly impossible today as the market values of these assets have drop so dramatically over the last two quarters. There just isn’t the value there to take a loan against.

SBA backed loans remain just a difficult and costly to obtain as always. These loans still need to be underwritten by traditional lenders who are not making any loans at all as well as be underwritten by the SBA who has followed the banks’ course in tightening standards.

So, what are new, small businesses to do?

A few suggestions are as follows:

First, start smaller and work your way up. Small scale operations mean smaller capital needs. Thus, the small amount of capital a new entrepreneur does have (savings, home equity, retirement plans) can be used to jump start a business if it is designed on a smaller scale.


Micro-Loans: Micro-loans are loans for small organizations or start-up companies that do not qualify for regular loan facilities. These loans usually range from $500 to $25,000 and take up to five weeks for approval and funding.

Personal Loans: There are still a few companies that make personal loans from $10,000 to $100,000 provided the borrower has excellent (and I mean excellent) credit and a demonstrated ability to make the loan payments.

Asset Based Facilities: If your business has some proven track record, even if it is just for a few months, and has generated some financial assets like accounts receivables or credit card receipts, you may qualify for capital against those assets.

Account Receivable Factoring can help speed up your cash flow while you wait for your customers to pay you. You can then access working capital that can be used to generate new business, cover current liabilities obligations, or make payroll. There are companies that will factor receivables as low as $200.

Included with Accounts Receivable Factoring is Purchase Order Financing. If your business has an order to be filled but does not have the money to complete the order (e.g. buy supplies or equipment or hire needed labor) Purchase Order financiers will provide the funds needed based on that order.

Business Cash Advances, while not really a loan, can provide working capital against FUTURE credit card sales. The funds can be use for any purpose and could provide the capital your business needs to get it through these troubled times.

Equipment: Do you own some equipment outright? If so, you can sale that equipment (including tools and machinery) to a leasing company. Then, lease the equipment back from the lessor. You get the cash you need now and still benefit from possible tax deductions of the lease payments and other costs.

Where there is a will, there is always a way. These may not be the cheapest financial products in the market but for most business owners and start-ups, these may be the only option.

When seeking capital in this market, try to keep in mind that it is only temporary. The markets will turn around and lending standard will loosen. So, what you seek now should only suffice enough to get your new, start-up business through this down period.

Copyright 2009 - BusinessMoneyToday.com

Joseph Lizio holds and MBA in Finance and Entrepreneurship and has a strong commercial lending background. In his current venture, Mr. Lizio is the founder of www.businessmoneytoday.com - a site designed to help business owners find and obtain capital to grow their businesses.



source: www.businessknowhow.com

Demonstrating Your Company's Commitment to Sustainability

As we head into 2009, new examples of wind and solar energy initiatives are popping up everywhere. More and more companies are looking for ways to reduce energy spending and create a corporate culture dedicated to improving the environment while still focusing on business.

Such changes should take place internally and also be reflected externally with your company's brand in mind. As a small-business owner, you should make certain the message and the media you use are aligned to show exactly what is important to your company and how it relates to the overall community. If, for example, you are thinking of outdoor advertising such as billboards, consider alternatives to bright LEDs, because they raise questions about safety and light pollution. Instead of print advertising, consider Web options to reduce the amount of paper waste created by corporate mailers.

Always remember that the tools you use say a lot about your business and its commitment to the environment.

source:www.businessweek.com

Building brand strategy

Most people think that building a brand that was first to use large-scale ad. The facts prove out companies that build the world’s famous brands for the first time using public relations (public relations). Public relations involves a variety of programs designed to promote and / or maintain the image of the company or its products. Advertising is needed to maintain the brand not to die, but not to build the brand for the first time.
Microsoft uses when the Public Relations has launched new operating system Windows 95. Windows 95 is not actually a completely new product, but Windows 95 makes it very easy to use as well as the Macintosh. Release dated 24 August 1995 is a day for disturbing the Windows 95. The Wall Street Journal estimates the 3000 main news, stories and 6,852 more than 3,000,000 words devoted to Windows 95 from 1 July to 24 August. Microsoft teams in the world to publications that attract attention. Windows 95 banner flap is 600 feet from Toronto’s CN tower. Sprinkle red, yellow and green from the Windows 95 logo on the Empire State Building in New York. The pay of London’s Time to distribute a free daily publication that all 1.5 million copies to the public. When Windows 95 sold at 90 dollars, thousands of people queuing to buy them. At the end of the first week, sales in the United States reached 108 million dollars. Microsoft issued a cost of 220 million dollars to the Public Relations. Why Bill Gates to spend so much to the Public Relations. There are two reasons that may be. First, worry about the defects found in early versions of the operating system, computer users may be reluctant to buy them. Microsoft wants to overcome this reluctance. Second, Apple Computer quickly lower the price of compromise with the expectations can sell more Macintosh computers before Windows 95 is similar to the Macintosh operating system sold on the market. Microsoft wants to stem the flow Macintosh sales by selling as many Windows 95 package in time as possible.
Anita Roddick build The Body Shop brand into the world without advertising, but do the Public Relations wide world without familiar tired to introduce their products. Walmart as a company with the most impressive world, only a little issue ads. Similarly Intel, Dell, Compaq, Gateway, Oracle, Cisco, SAP, Sun Microsystems was first created in the pages of Wall Street Journal, Business Week, Forbes, and Fortune, by publicity, not with ads. We also started Primagama, IMKI, STMIK AMIKOM Yogyakarta, RBTV, PT. Surya Mataram Visi, MQ FM Radio PT, PT. GITS, AMIKOM.NET, AMIKOM Traning Center, and Time Excellindo with Public Relations.