In this video segment, Ken Yancey, the CEO of SCORE, and investment advisor Phil Town answer questions from MSNBC viewers on funding for their small businesses. The two debunk the myth of federal grants, caution viewers on accepting investment dollars from friends, and clarify the full credit risks of bank loans.
Author Peter Johnson offers some advice on what to do before you seek investors in this December 2008 video interview with CNN Money.
When banks say no, owners of cash-starved small-businesses aren’t giving up on finding loans. Many are turning to microlenders for the money they need to meet the payroll, buy supplies, pay the rent and keep the lights and heat on.
These microlenders — community-based nonprofit lenders that draw on a varying mix of financing from the Small Business Administration; other federal, state and local government agencies; and some philanthropies — say small businesses and entrepreneurs are increasingly seeking financing as home equity loans, credit lines and other loans have all but evaporated.
Adding to the pinch, credit card companies are slashing spending limits for many cardholders, including some longtime small-business customers who have relied on their credit lines as a source of ready cash.
Even profitable small businesses that once relied on banks for financing are depending more on microlending, a resource that was originally intended to be a lifeline for women, low-income and minority entrepreneurs.
Microlenders around the country say they are encountering a rush of inquiries and an increase in applications for their loans, which usually range from $5,000 to $35,000… Read more at When Banks Say No, Microlenders Say Yes – NYTimes.com, published 11 March 2009
Flickr photo credit: Daniel Y. Go
As a startup wedding and event photographer, I made a list of all everything I need to purchase for my business, and it literally scared me. Between investing in equipment, software, Web site design, and advertising, my projected income is much less than my necessary expenses for this company. Photography has been my life’s passion, and I really want to succeed. Is there any advice you can offer me? —M.M., Chicago
Fear often stems from lack of understanding. Delving into the financial details of your venture should clear up your confusion and give you confidence to proceed—or perhaps persuade you that your business model is flawed and needs to be overhauled or scrapped.
You’ll need to consider both your startup expenditures and your operating costs, since the latter will help determine how quickly you can pay back the former. There are many ways to save on startup costs …Cutting Startup Costs – BusinessWeek, published 10 February 2009.
Flickr photo credit: tk yeoh