Raising Capital

Raising Debt or Equity Capital is a difficult process. There are many potential avenues for raising capital including:

  • Business Loans (Conventional)

  • SBA Loans

  • Angel Investors

  • Venture Capitalists

  • Private Equity Firms

One of the primary keys to raising capital is to develop a strong business plan that clearly showcases your business, its objectives, and the expected financial results during the first three to five years of operation. By having a strong business plan, you will be able to effectively present your concept to potential angel investors, venture capital firms, or banks for SBA Loans, or Business Loans. We encourage you to read our articles regarding raising capital and how best to do it.

With the recent downturn in the economy, it has become more difficult to raise capital through any avenue including business loans or private investment funds. However, it is certainly not impossible. Businesses with excellent earnings potential are still being financed through debt and equity capital vehicles.

When approaching a potential funding source it is imperative to clearly define why your business is economically viable and when it will reach profitability. This is especially important if you are seeking a traditional business loan as lenders will want to be able to thoroughly calculate your ability to repay the interest and principal via the positive cash flow of your business. Banks, especially for smaller businesses and startup companies, will focus heavily on your profit and loss statement as well as your cash flow analysis. If you are having difficulties developing these types of financial models then it is strongly suggested that you hire a private business plan development firm and/or a CPA to assist you in this process.

Additional companies that can assist you in the capital raising process include loan brokerage firms as well as private placement brokers that can assist you in the capital raising process.

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