California Small Business Blog

Money to start up or expand your business

There comes a point in time when you realize you need more money to keep your business going, or you need money to expand your business. I have previously discussed some of these options. But where else can you go to get money to start up a business or expand a business? Here is a quick list:

• Tax refund
• Selling your collectibles
• Disability insurance payments
• SBA Loans
• Angel investors
• Get money in advance on contracts
• Barter

These seven ideas are a bit different from the usual advice. But if you follow them, you have a few new sources of money for your business!

Private Placement Financing

About.com had an interesting article on private placement financing for your small business. Private placement financing is when people invest in your company. It usually does not require a filing with the SEC. And you do not lose control of your company, as when you go public.

Four benefits to this:

• High degree of flexibility in the amount of financing
• Investors are more patient in expecting returns
• Lower costs than an IPO
• Quicker than going to venture capitalists

Of course, like anything, you need to evaluate this based on your situation. Each small business is going to be at a different phase. You should also consult with your CPA and your attorney before considering any financing.

Applying for a small business loan

When you are starting up, or when you want to expand your business, you may need to look at a business loan. While it would be great to be independently wealthy, most of us are not. And even if you are, it may make financial sense to take out a loan anway. (Consult your CPA for tax advice.)

Matt Bacak of Powerful Promoter wrote an interesting article describing the process of applying for loan. After reading Matt's story, you will see that it is a time consuming process. And remember, a bank would rather give you a loan when you have money, then when you dont have any money.

The other thing left out of the story is to look for an SBA loan. The SBA loans generally require much less documentation than other loans. There are additional requirements and the SBA website lists some of these requirements.