5 Ways to Find Business Capital
You're certain that your company can emerge from this downturn better and stronger--if only you could tap into funding. Here's how to make it happen.
April 1, 2010
1. Join forces. "Creativity is the key," says Kelly Sweeney, CEO of Birmingham, Mich.–based Coldwell Banker Weir Manuel. "Mergers and acquisitions can provide tremendous growth opportunities in some markets. Taking on partners and national brand affiliations can also often provide realistic sources of capital."
2. Build personal ties. Establish good relationships with bankers, credit unions, and private investors, says Annette Slater, ABR®, ABRM(sm), broker-owner of EXIT Realty in San Antonio. Don’t be afraid to ask them direct questions about business lines of credit, along with creative financing options available to self-employed business owners, recommends Scott Caballero, ABR®, GRI, broker at Caballero & Associates Realty in San Antonio. Also, see what loans the Small Business Administration is offering, Slater says.
3. Choose the right people to build your company. "The answer to finding business capital is attracting intellectual capital," says Brian Wood, principal of Damico Realty Group in San Diego. "The trait constantly lacking in real estate companies is logical and rational thinking, which inevitably results in the company’s demise. Flourishing companies have been able to draw the right individuals to raise the capital for the company’s success. To simply seek funds without this solid backbone is a formula for failure."
4. Rely on reserves. "The smartest way to find capital," says Travis John, owner of RE/MAX Gold Partners in Apopka, Fla., "is to make sure you have reserves." No matter the type of market you’re in, keep building your reserves. There’s no better time to use your reserves than to expand your business smartly—as long as you leave enough to fall back on if you run into trouble.
5. Don't take on debt unless you have to. "Use loans only as a last resort," says Gea Elika, ABR®, founder and principal broker at Elika Associates in New York. "Debt is the problem today. Instead, work hard and convert transactions to capitalize your business."