Small Business Financing Presentation.wmv Video provides overview of an array of small business financing options to fund the growth or startup of a small business. The video introduces the viewer to the numerous options, both traditional and non-traditional, that exist. This video is very basic and is meant for those who have either a minimal background in raising capital or who know only a few options, but deeply.

Hello my name is tiffany see right and today i’m here to talk to you about financing your business to go over some of the options that are available to you to fund the startup or growth of your business or to fund and acquisition this particular presentation is targeted at small businesses those with 500,000 25 million or less an annual revenues for those with

Significantly larger businesses check out the medium-sized business presentation that i previously posted if you want to know more about me and my background i cover that briefly at the end the first thing when it comes to financing your business if the take what is often perceived as an innovative approach by business owners you must view your business as a separate

Viable entity from yourself just like a stock or bond or real estate or any other asset out there you need to view your business as a marketable asset you need to view your business as a source of long-term wealth and as a creator of employment and job you also need to look at your company as a source of investment income for yourself and the other founders or for

Others who believe in the business otherwise known as investors in this presentation i’m just discussing options obviously bank debt is an alternative and everyone’s aware of that there are also alternative debt options that exist asset-based lenders are a big source these include receivable financing entities such as factoring companies and accounts receivable

Credit line providers it includes purchase order financing which is actually guarantees this category also includes equipment loan providers which are typically industry-focused manufacturers distributors or third-party equipment financing entities you can take out a loan against a property you or your business owns you can utilize the prior of vendor financing

There’s a tried-and-true use of business credit cards in charge cards the key here is to remove any personal guarantees on those credit cards or charge cards over time if your company is really small and only needs 25,000 or less there are micro lenders such as accion available or you can utilize peer-to-peer lending sites like prosper com when a company is small

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And largely unproven the best sources of funding are from those who believe in you personally and think your business concept is viable therefore for small businesses and startup the first equity source to tap is your own personal investment the next is investment from family and friends after that sources include angel investors who are individuals or companies

To invest in approval in unproven ventures hence the moniker angels then there then we move on to the next step which are joint ventures you can form lee partner with another proven entity to go after a new market that’s just one example of a joint venture that entity may provide much of the initial funding another option is strategic investors such as a midsize

Company operating in your realm yet another option is direct public offerings or dpos through which you can tap your customers and others for equity the maximum amount that can be raised to a dp 0 is 1 million what do investors want and this is very important to keep in mind investors 1 a strong return if it’s a bank or similar low-risk entity then they want a

Slower return like eight percent but if it’s a higher risk entity or if the company has an elevated risk profile or they are investing in equities such as a private equity firm does then i want a greater return like forty percent or sometimes even higher they need a clear payoff date and an exit strategy typically within three to seven years but they need to know

When they’re going to get their money out they are not interested in hanging out for 10 15 or 20 years with no idea of when they’ll get their money back they want to know in advance when they can expect the payout and they paid prefer to have an option a and an option b in case plan a doesn’t work out a strong management team is vital a strong management team can

Take a social company and make it great but a mediocre management team can take a good company and drive it into the ground investors also want a base valuation of the company you should know what your company is worth the investors may value the company higher or lower but if you have no idea what your company is worth then you have no idea whether or not you’re

Getting a good or bad deal on the money the investors are putting in and you need to have a plan to accomplish your goal if you say you can double the size of your company in three or five years or reach a certain revenue target during that time frame and the investor asked well how do you plan to accomplish your goals and you just say oh that’s my good you lose

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You lose all credibility blended dederick or equity is also known as hybrid this is available for small companies but the options are greater once you reach 10 million in revenue for small companies these are available through your personal business brokerage account and other sources include mezzanine or acquisition finance companies and what this is is typically

Debt at a higher interest rate than you would get at a bank with warrants or options attached to them i’ll go into what this is and what warrants and options are and another presentation later but for now just know that these exist now the main thing when you’re thinking about sources of financing is to be aware of how much money you need that’s why you’ll see

Sources and uses of fund how much do you need and for what because you may not actually have to go out to an official financing entity to find the funding the funding may be available right there with your partners or your customers or whatever depending on what you’re trying to accomplish if you’re trying to enter a new market you may be able to co-brand or co

Market with someone else you may be able to pull funds through a cooperative or your customers may help you through customer deposits and prepays or you may opt to higher management engineers or other personnel and service providers using equity as a form of partial or full payment there are economic development grants that exist to help companies grow and the

Amount of these depend on the impact that the company will make in a city or region in which the company is located there’s licensing you can use a self-directed ira to fund a company’s growth or startup and there’s the option to swap or barter and again i will go into these in more detail and later presentations i just want to make you aware of the alternatives

That are out there or at least some of them now if you’re looking at acquiring a company remember the financing comes from or is based on the entity that you are acquiring so if you’re buying that company as an individual or if that company is significantly larger than your current company that’s fine because whoever is providing the financing is not primarily

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Looking at your particular assets to pay the money back in general they want to make sure that you have skin in the game so they will take a look at your assets but they’re mainly focused on the cash flow generated by the company you’re acquiring that cash flow will be used to pay down the debt or to generate the expected return on equity if the company you’re

Acquiring is too small to generate much cash then you then you or your company will be looked at to pay back the loan or generate the return and of course you know this in advance so the options that exist for acquisition financing a small companies include owner financing supplier or vendor financing mezzanine or bridge financing bank debt receivable financing

Or prepaid again i’ll talk more about these later so to get started here’s my little pitch i wrote a book called solving the capital equation financial financing solutions for small businesses and it’s available on amazon it actually does read very easily it has really easy to follow case studies and examples suggestions questions and guidance and is written the

Same way i’m speaking now we also have an e-book help i need money for my business now available online at www business financing resource com you can download that one immediately the other book is available on amazon again i said i’d give some background on myself in the last five or six years i’ve helped companies raise about 31 million in financing i have an

Mba in finance and entrepreneurial management from the wharton school of business at the university of pennsylvania i have bought a company and i’m looking at buying more i have started a couple of companies i’ve served as the interim ceo coo and cfo of a number of companies and i’ve served as an advisor to a number of ceos in addition to sitting on the advisory

Board of a few small companies so that’s just a little bit of background on me if you want to see more financing options check out my blog at blog that small business growth capital com i’m tiffany see right there’s the information thank you very much

Transcribed from video
Small Business Financing Presentation.wmv By The Resourceful CEO