scarfaceI ABSOLUTELY LOVE THE AL PACINO DEPICTION OF SCARFACE!!!! What an amazing motion picture friends… OK, you may be asking yourself, what in the !@#$ does this have to do with business financing? I’m glad you asked friends. I learned both in business school as well as in the ‘school of hard knocks’ that if ‘IT DON’T MAKE DOLLARS, THEN IT DON’T MAKE SENSE. I wouldn’t necessarily stake my life on this notion, but there’s a lot of substance to it especially in the business financing arena. In today’s post in which I’m attempting to keep light, we’ll be feasting our brain noodles on the types of business loans that are available for business owners depending on the business life cycle phase that he or she finds themselves in. Without further delay, LET’S DIG IN…

Let’s get the 800 pound hyena… or elephant??? out of the way first. For those business owners or aspiring business owners that are in the start up or early stage of business operations, your business financing options ARE SLIM TO NONEXISTENT… AND THAT’S A GOOD THING FRIENDS. In the initial stage of business operations (i.e first two to three years), you as the business owner are really trying to figure out how to take care, nurture, and grow your business. I compare this time to the first two to three years of raising a child from baby to early adolescence. crying babyIT IS NERVE WRECKING AND YOU FEEL LIKE YOU WANT TO RIP YOUR HAIR OUT (THAT’S IF YOU HAVE ANY) SOMETIMES. But, all in all, the great moments far outweigh the bad, and eventually you find a routine that works. For this business life cycle phase, I recommend that you implement (i.e. Google Search) the following resources to fund business operations during the start up / early stage phase of the business life cycle:

  • SBA Micro loan from a preferred SBA Lender
  • Business Credit Cards from Bank and Non Banking Sources
  • Fake it to You Make It or “Bootstrapping” (PLEASE READ Raising Capital For Dummies… YOU WON’T REGRET IT)

For the next business life cycle phase, growth and expansion, you ARE READY TO FLEX YOUR MUSCLES TO THE BANKER NOW (if you so choose). bodybuilderYou’ve been in the gym so to speak and working on perfecting your physique. After being in operations for more than three years, you’re ready to scale up the business which means that you’ve figured out how to make money CONSISTENTLY AND PROFITABLY WITHOUT PISSING A LOT OF PEOPLE OFF AND YOU’VE ACTUALLY FOUND A WAY TO PROVIDE A SOLUTION FOR THE PROBLEMS PEOPLE HAVE. I recommend that you research the following sources to help your funding needs during the growth / expansion business life cycle phase:

  •  Your friendly community or regional banker
  • Build relationships with attorneys and accountants BECAUSE THEY DO BUSINESS WITH BANKERS CONSISTENTLY
  • Your local (or state) SBA office

Last but surely not least friends, there is the maturity / decline phase of the business life cycle. People change… animals change… THE WORLD CHANGES!!! Guess what friends, the environment in which you are operating your business WILL CHANGE and you must be ever so prepared for the turbulent trade winds of the consumer market. During this stage of the business life cycle (and I’m guessing you’re still operating the business as opposed to selling the business or dissolving before the ‘harvest’), the hope is that you’ve become so business savvy that now you’re self-funding the business due to the excess free cash flow and it’s rather simple to retrieve business financing because your capital assets have a lot of equity value (and is still in good shape) and your somewhat liquid (i.e. have available cash in various investment accounts) both personally and corporately. At this stage of the business life cycle, you should have a pretty solid relationship with a competent commercial banker that’s become a trusted adviser to you and you’re looking to either exit the business and / or transition to the next business opportunity.


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