With the ever growing and evolving start-up landscape, a very important question among business owners is always raised – “how can my company finance its growth?”
Having met with dozens of young entrepreneurs, I learned that financing information available to new business owners is often incomplete. Contrary to the beliefs of those who enjoy popular TV shows such as Shark Tank and The Profit, giving up equity in exchange for seemingly small dollars (even if Mark Cuban is attached to them) is not always the answer. While it is certainly appealing to be on national TV or to gain powerful investors, giving up a portion of the company’s profits and decision making power can ultimately be very costly, and can arguably be deemed the most expensive form of financing. It has been proven, timeand time again, that a company with a solid business plan and leadership can still succeed without divesting ownership.
When I first joined the world of commercial finance, I was surprised with how little of my schooling in business and law touched on financing for small and mid-size businesses which, according to recent years’ studies published by the U.S. Small Business Administration, amounting to about one-third of the US economy’s exports. Even more surprising was that my lack of exposure was not an idle experience, but rather a sentiment shared by many in the commercial finance industry – an expansive network comprised of attorneys, accountants, bankers, and other financial services professionals. So if schools don’t teach how to finance growth, who does?
Some commercial finance professionals take it upon themselves to educate business owners on the financing options available to them. Not only does it benefit everyone involved, but properly advising clients is also the most ethical and professional thing to do. Taking advantage of this education has benefits that surpass the “textbook” definitions, and include experience-proven solutions as well as a connection to other professionals in the industry who can help a borrower find a custom tailored financing option.
If your company is not quite yet “bankable” – meaning, it does not yet have several years of financials or the required profit margins and other financial ratios that bank would like to see– your company may still have valuable assets which it can finance, and a professional specializing in one of the following financing products may help you find the right answers depending on your company’s assets:
- Financing Option
- How It Works