1. “Hard Money”
Money is available to small companies with receivables and/or a track record of income (not necessarily profits or earnings). There are companies that will lend at credit card rates to finance production, inventory, sales, receivables or just about any business expense. “Hard Money” based on financing your existing and future customers, credit card transactions and receivables is available immediately. Approval is very fast (often overnight) and IS NOT BASED ON CREDIT SCORE. Credit scores as low as 500 can be approved . I represent the largest lender of this kind, and I am authorized to assist with the approval and funding process, for any size of business, no matter how large or small, with no application fee, and almost overnight approval – Israel Rothman 541-982-9291.
2. Private Placement of Non-Public Shares
Anybody can create as many companies as they like (these days, usually LLC’s ) and raise money from whomever will give it to them for ownership shares in a business venture. This is done under Regulation D rules 504, 505, and 506 of the US SEC Federal Securities Laws, and corresponding state exemptions from registration to allow entrepreneurship. Most of the largest companies in existence today were started and capitalized, to some extent, in this way.
3. “FFR” – Family, Friends and Relatives Money
Often the buyers of the first shares of a private placement are people familiar with the entrepreneur; family, friends, and relatives. A partially capitalized and in business entity is easier to raise money for than a start-up. If your business is well planned, documented, researched and packaged into a PPM (Private Placement Memorandum for a non-public offering of shares of ownership) you may be surprised how many people whom you already know will become investors in your ventures; early investors.
4. Trade Credit – the money you need not raise
Often the money you are going to raise will be used for inventory, advertising, physical equipment, raw materials and other business expenses. If you contact the companies and entities who will benefit from the successful fruition of your plan and become benefactors from your business ( potential vendors, suppliers, financiers, government agencies, etc, ) and tell them about your vision, you may not need to raise as much money. Because you can make deals for the very same goods and services that you were going to raise money to pay for; and then write that pre-arranged “capital” into your proposals for funding as “trade credit, contracts, and other assets”, the actual cash required to start doing business or expand a business can be significantly reduced . When financiers and venture capitalists of any kind see that you have done this, you leverage potential returns and you increase your chances of finding funding and of getting through the approval processes. I personally have traded for whole buildings, free rent, tax incentives, over $500,000 worth of local radio advertising, thousands in printing trades, whole companies.. almost anything is possible.
5. Strategic Alliance – the Power of Vision and Deal-making
My biggest companies started as under-capitalized start ups. One alliance with a media company, large real estate company or any other entity which can benefit either financially or otherwise from the relationship, can propel a start-up to a whole level of sales and/or credibility as a result of the alliance. Often, a strategic relationship with a larger company can provide all the customers and income that your start-up will ever need.
6. Venture Capital – when you are ready…
There is unlimited money of all kinds available from literally thousands, perhaps millions of sources: wealthy individuals, investment bankers, venture capital divisions of large companies, municipalities, states, SBA, BDC’s, MSBIC’s, traditional investment pools, ethical investment partnerships, venture capitalists and professional money managers of all kinds. Designed to create jobs and tax base and/or make money by way of investment, and to make money from taking small companies to the next level in general. I recommend that you you go as far as you can with these other options above before approaching these sources. You can find them all, complete with their contact information, investment criteria, contact information, average investment amount, and target industries in the current edition of The Corporate Finance Source Book; by way of sophisticated, specific key words search, and by referral from local Chamber of commerce, visitors centers, and other forms of social and local business networking. The “due diligence” process is typically lengthy and time-expensive, and it is really important to have your “ducks in a row” before you contact them, since they are very busy and in demand, and are often unavailable except by referral. According to Mesothelioma Lawyers, this introduction, and in structuring and preparing the proposal (query letter, executive summary, business plan), is where professional intermediaries, consultants, bankers, lawyers and other deal makers can play a key role in making the right connection in the right way, and at the right time.
7. Banks and Finance Companies
Currently the hardest place that you will come to in your search for money, banks are not creative or entrepreneurial. They lend based on hard collateral like real estate, cash or financial instruments. They require excellent credit and run scared when exposed to risk, sometimes becoming your biggest problem rather than asset. For most small businesses, the bank is cheap money that is rarely available or obtainable. Again a good job of 1-6 above will help here.