One of the biggest issues always top of mind for entrepreneurs is raising capital. Fortunately, the lending environment has improved and with historically low interest rates, it’s a great time for entrepreneurs to access the money that they need to manage and grow their business.
But knowing where to start and how to navigate the myriad options can be daunting for small business owners. That’s why I recently moderated a Google Hangout presented by Bank of America*, which included Barbara Weltman, Small Business Expert on Tax and Financial Matters, USA Today Columnist Steve Strauss, and Bank of America’s CEO of Practice Solutions, Joe DiNicola.
Plus, I have personally helped companies raise more than one billion dollars over my career, so we were able to generate some amazing insights to make the capital raising process an easier one for you.
You can watch the full event here, but some of the key takeaways included:
Start with Where to Start– The appropriate capital provider will differ for you if you are a startup or a more established business. So, seek out the help of people like CPAs or a business banker to get yourself on the right track and to also make relationships that you can leverage over time. In addition, be prepared with your financial statements and projections for the business and your personal financial information. This preparation will up your chances for success.
You Can Negotiate– The favorable lending environment means that you have more choices on who to partner with, as well as the ability to negotiate key deal terms. You may not be able to negotiate everything, but you may be able to negotiate how much you are borrowing, the interest rate, the term of the loan and other key deal terms. This gives more leverage and creates more opportunities for small business owners.
Don’t Sweat Interest Rate Hikes– While investors in the stock market are in a panic over whether the Fed will hike interest rates, as a small business owner, that shouldn’t be a concern. A small rate hike of 25 basis points (or a quarter-percent) shouldn’t have a big impact on interest payments, nor affect the availability of capital for entrepreneurs.
Look at “Alternatives” Carefully– Whether you are starting out or looking at different uses for your capital in your business, sometimes alternative funding can be a fit for you. However, when you look to these sources, take them seriously. Some alternative lenders aren’t as reputable, so do your homework. And while crowdfunding can help you to pre-sell a new product, it takes a lot of marketing effort on your part.
You can get more details on these tips and some additional tactics to help you be more successful in your capital raising endeavors by watching the 30-minute video of the event. Make sure to make the time to do this, and pursue other strategic endeavors where you can work on your business, not just in it. It’s worth investing a half hour of your time to take your business to the next level!
*Disclosure: this company has a client relationship with CarolRoth.com or its affiliated entities