Money is critical to the success of a new business. Learn more about the current state of small business financing and the different ways money can be acquired.
June 23, 2012 /24-7PressRelease/ -- Money is the lifeblood of any new enterprise. With it, a small business can expand and flourish by purchasing new equipment, funding a marketing campaign and even hiring more workers. Without it, there are considerable challenges that may not be overcome. The business may not establish a solid following or client base, it may be vulnerable to the ebb and flow of the market, and it may not outlive initial growing pains.
The recent recession made things worse for small businesses, as many banks were reluctant to lend. However, that trend may be changing. The following article will highlight the current state of small business lending and identify some additional options for cash-strapped businesses.
The news of economic uncertainty in Europe, and how it may affect the U.S. economy could be playing a role in the current state of small business lending. Borrowing has slowed in 2012, with loan originations declining each month this year. Essentially, businesses are being cautious about their needs and want to avoid the difficulties they faced when credit dried up during the last recession. Despite gloomy economic forecasts, money is available for small businesses. According to a recent Huffington Post report, the Small Business Association (SBA) has $30 billion in loans available for small businesses. Even those in the so called "valley of death" (businesses seeking $1-4 million in capital) may seek assistance under a new initiative created to encourage more private sector investment.
Also, more businesses are taking advantage of non-traditional sources of funding, especially through the Internet. Entrepreneurs are using Facebook and LinkedIn to find investor match-up sites where they can advertise their need for capital. They are also joining online communities where other investors and entrepreneurs share information. Also, crowdsourcing sites such as Kickstarter.com, Chipin.com and Indiegogo.com allow people to donate money to support a business. The benefit of crowdsourcing is that a business owner does not have to sacrifice equity in the business in exchange for funding.
Loans, investments and equity shares all come with a number of potential legal issues. If you are seeking more capital for your business, contact a business law attorney for more information.
Article provided by Watkins Firm, A Professional Corporation
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