NYBDC loan program making a difference in New York State

If you're a small business owner looking for finance resource in the state of New York pay attention!

The NYBDC (New York State Business Development Corporation) is about to receive another jolt of investment. State Comptroller Alan G. Hevesi visited Aero on Monday to announce a $100 million commitment by the New York State Common Retirement Fund to the NYBDC to fund new loans

This organization has already pumped funds into various small businesses in New York and plans to get even more involved now that they've gotten this latest cash infusion. Here's an article that goes into more detail regarding this program:
http://www.buffalonews.com/editorial/20051129/1019580.asp

But, New York is not the only state that offers programs such as this. I'll keep posting such opportunities on this blog, but you should be spending your time snooping around in your state to find similar programs.

Make sure to check back often for more small business finance advice.

A great website for small business finance

I found what seems to be a very cool small business finance site.

If you're starting a new business, looking to buy a business, or simply looking to finance your existing business make sure to check out http://www.businessfinance.com.

The site has a very easy to use interface that allows you to search for funding based on your specific needs. I've never personally used them to secure financing, but I am going to do a little investigating to see just how valuable their service might be.

Stay tuned...

Citizens Bank to promote business credit and charge cards

New business owners will find that securing a true "business" credit card for their company is extremely tough. I'm not talking about the ones that are secured by the owner's personal credit. I'm talking about true Business credit accounts that are based on the business' credit.

The reason is that building business credit is an extremely difficult process to get started. You have to locate a bank or company that is willing to extend credit to an entity that has no prior credit history. One good way to get the ball rolling is to acquire a cell phone that is billed to your company, however, be prepared to pay a hefty deposit to Sprint or one of the other carriers. There are other ways as well. You just have look around and ask questions.

Once you get an account of this nature you can begin to establish a solid payment history and thereby improve your company's credit score.

Here's an article detailing how Citizens Bank plans to offer business credit to it's commercial clients by rebranding the credit services offered by Corporate Payment Services (CPS). Incidentally, CPS is the commercial card unit of GE Consumer Finance:
http://biz.yahoo.com/prnews/051117/deth011.html?.v=29

I'll be back later for more small business finance advice...

University of Florida professors create a 10-step guide to starting a business

Two established economists and University of Florida professors have released a 10-step guide to starting a small business. Their document can be found here:
http://edis.ifas.ufl.edu/FE571

Unfortunately the two professors, Hank Cothran and Allen Wysocki, spent very little time focusing on small business finance considerations. They basically devoted step 9 of 10 to a brief overview of sources for financing a new business.

As usual, they suggested using personal funds, loans from family and/or friends and small business loans. Here's what they thought of venture capital firms and their relation to small businesses:
"However, venture capital firms and insurance companies are typically not useful for owners of small businesses."

In other words, when you're starting up, use your own money or the bank's money, and if you have rich friends hit them up too.

FinancingBasics.com is joining Technorati

Apparently, all I have to do is insert this link: Technorati Profile
and I will automatically get picked up by the Technorati blog directory.

Seems easy enough. Now let's see if it works.

For those of you who don't know. Technorati is arguably the most popular blog directory in existence, although Google's blog search is surely catching up.

I'll be back later for more small business finance talk...

Understanding the venture capitalist

Before investing a lot of time and money into securing a venture capitalist, make sure that you truly understand what today’s VC really is.
A lot of small business owners think of venture capitalists as deep-pocketed business high rollers that are scanning the horizon for start-ups in which to invest their money.

In reality, VCs prefer three-to-five-year old companies with the potential to become major regional or national entities. They want to see a small company become large, and in the process, collect higher than normal returns on their stock. The startup with no history of income, or any kind of history for that matter, has little chance of attracting a legitimate venture capitalist unless they happen to be a close friend or family member.

Another key factor to consider is that venture capitalists are extremely picky. They might peruse hundreds of potential investments, but only engage with a handful of them. Usually, the VC will stick it out until he/she can find a company that has the possibility of going public. The possibility of a public stock offering is critical to venture capitalists. Management structure, industry competition, innovation, and the potential for industry growth in general are also key factors.
Typically, a VC will want to have little influence on the day to day operation of a business he/she invests in, but if times get tough he may attempt to exert some control on the direction of the company. So the small business owner that likes to be in total control may have a bit of trouble dealing with a venture capitalist if the waters turn turbulent.

Make sure that you consider these points carefully before you spend your two most valuable assets on trying to secure some VC money. Time and money are a terrible thing to waste for the small business owner.

Please visit us again for more small business finance advice