A listing of books and Web sites that can help you find financing. Topics include private investors, bank loans, debt, economic-development programs, factoring, and going public.
Whether it's on the Web, in bookstores, or free for the asking, you'll find it in our street-smart guide to the latest and greatest information about raising money
We know what you want: money. No doubt you'd like to get your company as quickly as possible from its current cash-strapped condition to one in which it is flush with cash--preferably cash that comes with as few strings attached as possible. But before you venture into the capital markets, it pays to evaluate your options realistically. With that in mind, we've searched for the best resources to help you assess the wide range of financing methods used by growing companies. Whether you're approaching a high-powered venture-capital firm or Mom and Dad, the odds are that there's a resource here that can help you prepare. To further ease your search, we've arranged this information alphabetically, by topic.
ANGEL INVESTORS
Fantasizing about divine intervention from an angel investor? For a dose of reality (as well as plenty of practical suggestions about how to make a deal happen), try Finding Your Wings: How to Locate Private Investors to Fund Your Venture, by investment banker Gerald A. Benjamin and writer Joel Margulis (John Wiley & Sons, 800-225-5945, $34.95). It includes a useful analysis of what private investors look for in angel deals, as well as a valuable section on the due-diligence process. (The book's checklist of sample questions may scare off some entrepreneurs--but those folks probably wouldn't be the strongest contenders for angel financing, anyway.)
These days an increasing number of networks try to help entrepreneurs link up with private investors. To get a feel for how that works, explore the recently launched ACE-Net service, sponsored by the U.S. Small Business Administration's Office of Advocacy. It's an on-line listing service that seeks to connect entrepreneurs with potential investors.
BANK LOANS
For some business owners (especially those whose companies are start-ups), qualifying for bank financing can seem as unlikely as winning the lottery. For tips on improving your odds, try The Small Business Insider's Guide to Bankers, by entrepreneur Suzanne Caplan and banker Thomas M. Nunnally (Oasis Press, 800-228-2275, 1997, $18.95). This 152-page paperback does an excellent job of explaining how to search for the right bank and fine-tune the perfect loan proposal.
For many business owners, all that matters is winning bank financing, whatever the cost. But if you're negotiating from a stronger position, it makes sense to try to keep your borrowing costs down. That's where chapter 16 of Save Your Business a Bundle, by entrepreneur Daniel Kehrer (Simon & Schuster, 800-223-2336, 1994, $22), should come in handy. It suggests eight tactics that business owners can use to control their banking and finance costs. You won't buy a book for 10 pages' worth of information? Then check this one out at your local library. It's likely that you'll benefit from at least a couple of the tactics highlighted.
If you nurture your banking relationship, you should be able to expand your company's borrowing limits and branch out into new types of financing arrangements as they become appropriate. Borrowing for Your Business: Winning the Battle for the Banker's "Yes," by longtime banker George M. Dawson (Upstart, 800-235-8866, 1991, $19.95), does a bang-up job of advising business owners about building a relationship with bankers and planning early for loan renewals. Supplement Dawson's book with Inc.'s August 1997 article "The Art of the Covenant," which addresses the importance of negotiating for the right loan covenants.
BARTER
A good introduction is Barter Basics (Barter Advantage, 212-534-7500, free), a quick guide to business-bartering arrangements. You might also want to visit the Web site maintained by the National Association of Trade Exchanges or call the group at 216-732-7171. Finally, back issues of Inc. contain specific bartering tips that entrepreneurs can use to help fuel their companies' growth. Some samples: " How Swap Deals Pay Off," " Documenting Swap Deals," " Barter: Credit Lines with a Twist," and " A Customer Can't Pay His Bill. Any Suggestions?."
CREDIT CARDS
We know you don't want to rely too much on credit-card financing--but you might have no other choice. If that's the case, by all means shop for the best deal. One good way to comparison shop is by ordering CardTrak's monthly report on consumer credit cards. (Send $5 to CardTrak , Box 1700, Frederick, MD 21702, or call 800-344-7714.) Or check out the Web page.
CUSTOMER OR SUPPLIER FINANCING
If you're aggressive enough to approach your customers or suppliers when you experience a cash-flow crisis or capital shortfall, you may be pleasantly surprised by the results. For some practical illustrations of ways that business owners have tapped into their customers' pocketbooks, take a look at several Inc. articles: " Consumer Finance," " There's No Harm in Asking," and " Resources: Waste-Away Financing."
Inc. has also written about some effective supplier-financing strategies. Consider " When Supplier Credit Helps Fuel Growth," " Financing: A New Twist," and " Capital: Financing Purchase Orders."
DEBT
Don't make the mistake of believing that your only business-borrowing option is a line of credit. Raising Capital: The Grant Thornton LLP Guide for Entrepreneurs, by Michael C. Bernstein and Lester Wolosoff (Irwin, 800 -722-4726, 1996, $50), includes a great 15-page section, starting on page 47, that succinctly steers business owners through a wide range of debt vehicles, including asset-based borrowing, factoring, and callable debt.
