Financing Woes – how to finance your business

Number one on almost every startups top worry list is how to finance their new business. During the recent period of economic expansion many new businesses flourished with ready access to capital. As we previously noted here and here venture capital has dried up. With the lack of access to investment capital many entrepreneurs turn to home equity lines of credit and traditional loan programs through banks.

Unfortunately, the recent tightening in the credit markets are making this path more difficult also. Recently many lenders including Bank of America, Washington Mutual, and others have announced suspensions of previously issued home equity lines of credit – a primary source of borrowing for entrepreneurs. You can read more here. And, the Wall Street Journal reported yesterday a disturbing trend for small business:

Overall, a survey released this month by the Federal Reserve found that about half of U.S. banks are tightening their standards on loans to small firms, compared with about 30% that reported doing so earlier this year. And nearly two-thirds have raised the rates they’re charging on those loans.

What can you do?  Look carefully at your expenses. Decide what you really need to get the business off the ground. Negotiate negotiate negotiate and reduce you costs everywhere you can. Look for detailed financing solutions coming soon on thestartcompany.com

Tags: Finance & Tax, funding, home equity, small business loans, startup