Last spring
Another of Gates’ inspirations was his experience with his charitable foundation. Once he decided to seek solutions for global poverty and disease, he discussed the issues with friends and associates. He found that while many people wanted to help, the complexity prevented most from understanding the causes and how they could help solve the problems.
I see the same pattern every day as business owners struggle with all the complexity of their current business environment and then, with little time, try to tackle the complex and constantly changing world of small business finance.
How do you get capital? What do you really need to do regarding your business credit? What about a lease? What about a line of credit? What about credit card advance?
Not only is their plenty of complexity and confusion untangling this mess, it changes constantly. And now, with the credit world upside down, leadership and direction is critically important.
It is even more difficult and expensive to venture into this world without contacts, experience and a clear direction of what you want to accomplish.
As the most successful Harvard dropout encourages: “Don’t let complexity stop you. Be activists. Take on the big inequities. It will be one of the great experiences of your lives.”
If becoming a small business financing “activist” does not excite you, hiring one in today’s world will undoubtedly save you hundreds if not thousands of dollars in financing costs.
{ 4 comments… read them below or add one }
I love this article. I, too, agree with Bill Gates, in regards to the word complexity and how it appears as being quite problematic for some business owners.
I found the article inspiring.
I have great credit. I’ve paid off previous bills, and I’m paying my current bills on time. But because of the current level of actual activity in my business, I want to expand my services.
This expansion has the potential to increase my bottom line. But this expansion requires additional equipment and money that my business does not have, hence the introduction of complexity.
Because I placed so much faith in my ‘great’ credit, I approached several banks and applied for a loan with a business line of credit for $350,000.
I was informed, as a matter of fact, that because I am writing off all my expenses to the bottom line of my business, I did not qualify for this type of loan.
The banks I approached were basically telling me that my business is not making enough income.
What existing small business loan resources cater to business owners in my position? Does any institution exist that acknowledges the complexities faced by today’s business owners and actual address them?
I am desperately trying to keep pace with a highly competitive industry.
I found this article to cause me great concern.
I am a frustrated established business owner trying desperately to keep pace with a competitive market.
I’m currently sustaining my business expenses with my personal credit cards, and I have been doing so for quite some time.
I have successfully maxed out each of my personal credit cards.
Because of this situation, I am trying to get a loan in an effort to pay off all my personal credit cards and then, hopefully, be able to establish a business line of credit.
However, I find that most banks view me as a considerable risk because of my maxed out credit cards, and each attempt I make to acquire a loan is denied.
I am not quite ready to give up on my business. It is all I have.
I believe that by paying off my personal credit card balances I will take the noose of the neck of my business.
With a business line of credit, I will be able to allow my business an opportunity to stand on its own two feet.
What options are available to me to help resolve my business situation?
Matthew:
This is a common problem when business owners approach banks to solve their financial problems – frustration.
The bank is looking for your ability to repay and can’t get past the idea that good tax planning = inability for debt service.
Credit card advance will be one option. You could also lease equipment or use equipment you own as collateral for a loan. If your personal credit is at or near 700, there are some programs that may provide a business line of credit.
Ralph:
At some point every business owner needs to separate their personal and business credit, this is a process but will help you greatly.
Many banks will not provide funding if you are using more than 50% of your available credit.
Options? Use a merchant cash advance to pay down your cards and apply again or take the time to develop a long term strategy to build business credit and reduce your personal exposure.
That does not happen over night, but this will be a consistent problem until you resolve it.
Good luck.