Obtaining financing or capital is not impossible these days, but small business owners need to be creative in thinking about where to look for it. Consider these two resources when looking for financing:
1. Suppliers. Relationships that small business owners have with their suppliers can be a great resource for financing. Small business owners should do their due diligence, though, just as the bank would, and check the creditworthiness of their suppliers and have a lawyer draw up a formal loan agreement. Protective regulations, such as a Uniform Commercial Code filing, are helpful if financing does not come through.
2. Networking. Attending as many meet-ups and networking events as possible allows small business owners to connect with people in person. Whether these events are local or international, small business owners can continue to build these relationships online through niche Web sites with forums to engage in discussions, ask questions, and seek advice. More and more small business owners and entrepreneurs are turning to these sites and finding the resources they need for financing.
While there are signs economic recovery may be on its way, bank loans, venture capital, and angel investor loans will still be hard to come by this year. Small businesses should take a look around them to evaluate existing and new business relationships for potential financing before turning to traditional resources.
Steve Nielsen CEO PartnerUp Minneapolis