There is a huge difference between small business financing and big business financing. Big corporations have incredibly complex systems in place for financing their operations. That is why some corporations can lose billions of dollars and still remain viable (although there are limits here too, as we all now know).
However, of the approximately 32 million businesses in the U.S., only about 18 thousand have more than 500 employees, and are considered “big business.”
That still leaves almost 32 million small businesses that need some form of small business financing, not to mention the millions of small businesses still in their pre-venture phase who need development financing.
Let's Stop Right Here!
I am totally fed up with the business gurus, pundits, academics, and other business snobs who believe (and promote) that you must have a "product" —something sold in a box or downloaded into a device—in order to be called a "startup." Moreover, these same people seem to promote the idea that those are the only types of business worthy of attention for business financing.
The vast majority of the 32 million businesses in the U.S. are NOT high-tech businesses. Most of them do not even produce a product. Do these businesses (and others that will follow) deserve small business financing? Absolutely!
I presented a video by Tom Peters in an earlier section, where he discusses starting "…something dull." It is such an important issue today, that I am repeating the video here:
As you can see, $60 million and 20% annual growth is not bad for a "service" business that removes mold from basements. Most small "tech" firms only wish they could do as well.
Now, considering the vast number of different types of businesses, it is obvious that not all small businesses have the same financing needs. The type of business you have determines the avenue of financing available to you.
For instance, as a sole proprietorship you will have different challenges than will the high-tech software corporation; and the clothes boutique owner will require different small business financing than a machine shop.
In addition, the stage your business is in will also determine what form of small business financing you will need. That is, the startup will be looking at different financing methods than the business looking to finance growth. Obviously, there will be some overlap between the various small business financing methods and these will be discussed as we go along.
One Absolute Rule!
I want to caution every small business owner about the cardinal rule for seeking small business financing: You Must Be Prepared! It doesn’t matter if you’re hitting up your Aunt Matilda to help you start your kite store, or if you are presenting to a top tier Venture Capitalist—you must be prepared.
Here is the minimum of your necessary preparations:
You need to have an absolutely “knock-em-dead" description of your business and why it will succeed…in 25 words or less. Be prepared to recite this every time someone asks you what you do.
This is to pique the interest of any of your listeners/readers so they will want more information. You might be surprised at where your startup money might come from.
After you get someone’s initial interest—you need to be prepared with your 3-minute expanded story about your startup business. You need this when someone indicates they would like to hear a little more about your business.
If you are looking for financing from family and friends you should carry a copy of your "family and friends" Business Plans For Small Business with you.
If you are looking for outside investment, you should always carry copies of your Executive Summary to hand out whenever appropriate (as long as it is well done).
The purpose of the first two points above is to convince your listener/reader that you know what you’re talking about and that you have done your homework. No one is going to seriously consider listening to you if you stumble around trying to explain your new business. You want them to be attentive when you present your "pitch" for financing your business…so make it the best you possibly can.
If you can do these things, and do them well, you should be able to finance your small business no matter what the economy is doing; what kind of business you have; or what stage of development your business is in.
However, if you have an operating business that is failing and you need money to save it—your chances are not so good. (If you are in this situation, see my book, Be Your Own Turnaround Manager.)
Where Does the Money Come From?
I have included below; a list of several reports regarding small business financing that are likely to address most small business requirements.
Also, this section will continue to add new reports about small business financing, especially as we get questions and comments from readers.
So, check back frequently to see what revisions have been made, or new report has been added.
List of Reports For This Section
FINANCING A NEW BUSINESS This is perhaps the most difficult time in the life of a business to find financing. This report discusses the various means available for financing startups.
OWNER FINANCING BUSINESS Unfortunately, for the new entrepreneur, this is the most likely means for financing your small business. But even here, there are various ways to approach the issue. This report discusses many of them.
SMALL BUSINESS BANK LOANS Although it is difficult to obtain bank loans today, your local bank is still the best place to start. This report tells you why—and how.
SBA BUSINESS LOAN This report discusses how SBA Guaranteed Loans work and how to go about seeking them.
ANGEL INVESTORS This is a specialized and formal avenue for small business financing. Depending on your business, this may be an appropriate route for you.
VENTURE CAPITAL FUNDING A highly specialized form of small business financing made popular by the high-tech industry. However, it is not limited to high-tech—especially today when many Venture Capitalists are reaching out to expand their portfolios. This report on venture capital funding discusses the ramifications of venture capital and how it may apply to your business.
CREATIVE BUSINESS FINANCING When the normal small business financing channels discussed in the above reports do not meet your needs, there are still several potential sources for financing your new business. This report discusses various alternative sources of financing your business, and includes direct links to several of them as well.
BOOTSTRAPPING If all your attempts at small business financing fail, there is still one more way to start your business. This report shows you a road map of a fictitious example of how you could bootstrap a small business. Just know that this is not for the faint-of-heart.
Small business financing can be a difficult process for many new businesses. But, as you can see from the sources listed in the above reports, there are many channels of financing to try for…the key is to be properly prepared before you contact your sources.
If you can do these things, and do them well, you should be able to finance your small business no matter what the economy is doing; what kind of business you have; or what stage of development your business is in. 
