Figuring out what type of loan you need, of course, is only half the battle. Savvy entrepreneurs also analyze how much debt their companies can handle. Financing Your Small Business: Techniques for Planning, Acquiring and Managing Debt, by business consultant Arthur R. DeThomas (Oasis, 800-228-2275, 1992, $19.95), includes two absolutely priceless chapters: "Financing Fundamentals" and "Planning Your Financing Mix." Don't sign on the dotted line without reading them.
Finally, explore a Web site maintained by DataMerge. The site includes a "free financing-feasibility search" for business owners seeking to raise $20,000 or more. Think of this as a fill-in-the-blanks approach to money shopping: you provide your address and a brief description of your company, then DataMerge turns up plausible sources of capital. Also useful are some linked articles on topics such as how to spot "bogus lenders." (One hint: they're the ones sending all those unsolicited E-mails across the Internet, boasting how easy it is for them to find you all the capital you need.)
ECONOMIC-DEVELOPMENT PROGRAMS
For a wonderfully comprehensive list of all kinds of small-business support programs, look no further than The Small Business Financial Resource Guide, a 151-page paperback compiled by Braddock Communications, in Reston, Va. The book includes key phone numbers at both the state and federal levels, as well as some valuable extra features like a quickie section on key financial ratios. There's also a very good description of the roles of the "five partners of every loan": the borrower, the lender, the accountant, the lawyer, and the insurance agent. Best of all, you can get the book free by writing the U.S. Chamber of Commerce Small Business Center at 1615 H St. NW, Washington, DC 20062. You can also order it electronically through MasterCard's Web site.
EXPORT/IMPORT FINANCING
Getting involved in the international marketplace can be a great way to boost your company's growth potential, but it can also throw your cash flow into chaos. Foreign collections can be a nightmare, currency fluctuations can destroy profit margins in a flash--and then there are all those tax and accounting glitches no one ever warned you about. Here's where a top-notch reference work can really make a difference. (So can a top-quality accounting firm, preferably one with offices abroad, but that's another matter.) We recommend two: Export-Import Financing, by international banker Harry M. Venedikian and financial writer Gerald A. Warfield (John Wiley & Sons, 800-225-5945, 1996, $69.95), is worth its hefty price tag, thanks to in-depth discussions of a range of financing techniques and of the role played by U.S. banks, government agencies, and foreign lending institutions. A discussion of "exchange risks and opportunities" should be an eye-opener for fledgling international marketers. Exporting from Start to Finance, by international-business consultants L. Fargo Wells and Karin B. Dulat (McGraw-Hill, 800-338-3987, 1996, $44.95), contains a wealth of suggestions on key topics such as letters of credit, methods of payment, and international leasing.
FACTORING
Factoring--basically, an arrangement in which you raise cash against the value of your receivables for a hefty interest charge--can be a costly means to raise short-term capital. But since it's undeniably an option, especially for those companies that can't raise funds from banks, it makes sense to educate yourself. Unfortunately, there's not much available on the subject. But we can recommend pages 41 through 45 of Finding Money: The Small Business Guide to Financing , by Kate Lister and Tom Harnish (John Wiley & Sons, 800-225-5945, 1995, $17.95). The authors explain different types of factoring arrangements and include a valuable list describing some typical factoring-company policies. If nothing else, that list could help you comparison shop for better terms.
FAMILY AND FRIENDS
If your company is so new or so small that your only hope of attracting outside investors is to hit up your relatives or buddies, tread carefully. Start Up Financing: An Entrepreneur's Guide to Financing a New or Growing Business , by entrepreneur William J. Stolze (Career Press, 800-CAREER-1, 1996, $16.99), offers some good advice on this topic. For a sobering look at the emotional complications of borrowing from your parents, read " The Parent Trap," Inc.'s October 1990 cover story. If you decide to go forward anyway, you'll find a practical tip on structuring those deals in " CEO's Notebook" in the March 1997 issue of Inc.
GOING PUBLIC
There are plenty of good, well-balanced guides that discuss raising capital through an initial public offering. But remember, if your accounting and legal firms are well versed in serving the entrepreneurial community, they should be able to provide you with plenty of resources (human as well as written) to supplement whatever reading material you find on your own.
If you're just looking for a really quick introduction, a good place to start is with Arthur DeThomas's book Financing Your Small Business (listed above). It certainly isn't the only guide worth considering, but we do like its concise, easy-to-scan approach. You can learn a lot in its well-written 14-page chapter on going public.
For a quirkier exploration of the whole process, we'd like to recommend a short play (yes, play) written by two lawyers, Lloyd E. Shefsky and Misty S. Gruber. The two felt that they needed a more humorous and accessible approach for conveying technical IPO information to their clients. While the title, Prospectus Perspective: Private Deliberations About Going Public, is hardly catchy, this offbeat document has a great deal to recommend it, including some fairly realistic discussions among its characters about whether to hire a top-tier accounting firm ($9; not available in stores). To order a copy, write Lloyd Shefsky, Shefsky & Froelich Ltd., Suite 2400, 444 N. Michigan Ave., Chicago, IL 60611; call 312-836-4001; or fax your order to 312-527-9931.
