A Small Business Loan from a Hedge Fund?

It's hard to get traditional loans these days. But as banks tighten their purse strings, hedge funds are offering asset-based loans to small companies

In early 2008, Jim Gee hit an impasse. Over the previous five years, Gee had been expanding Trinity Communications, a small cable-TV company in Marion County, Tenn., that he founded in 2003. With startup costs of nearly $3 million, Gee had used personal funds to get the business rolling, laying fiber optic cables across two rural towns and attracting new subscribers. By 2008 he had 600 customers and 6 employees, but Gee couldn't find additional funds to service new towns and sign new subscribers.

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