SCORE Small Business Blog

The Money Is Out There
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Is your small business having trouble getting the capital you need to grow? A study released in late 2011 by The Hartford found that while some entrepreneurs are struggling to get financing, others find it surprisingly easy.

When The Small Business Success Study asked entrepreneurs, “How easy is it for your business to generate positive cash flow in a typical month?” 58 percent of respondents said it was either “very,” “moderately” or “extremely” easy to do so. Another 21 percent said it was “slightly” easy. Only 20 percent said it was “not easy at all.”

In some ways, the study’s results might seem surprising. We hear all over the news that capital is “impossible” to get. But in reality, many of the experts I’ve talked to recently are saying that money is out there—you just have to try harder, be more prepared, and be more flexible than ever before. (That pretty much describes the state of business right now, so why should obtaining financing be any different?)

One key factor in whether you’ll find getting financing a breeze or a squeeze is whether you’re looking to grow your business, or whether you’re fine with the status quo. The Hartford found that respondents who were focusing on expansion were the ones who had the most trouble getting the capital they needed. Almost half (43 percent) of these entrepreneurs said it was “extremely” or “very” difficult to get financing, while just 23 percent of maintenance-oriented business owners said the same.

Why the difference? I’d theorize that entrepreneurs in the maintenance stage probably have older businesses that are more stable and have less trouble generating the capital they need on their own. In contrast, entrepreneurs who are expanding their businesses are probably in an earlier stage, less stable and need more money. As a result, they might have a harder time generating it internally and might face higher hurdles when they approach outside financing sources.

The hurdles may be high, but they aren’t insurmountable, and you don’t have to go it alone. A SCORE Mentor can help you identify your options and prepare to approach lenders or investors successfully. If you don’t have a Mentor, visit the SCORE website to get matched with one today.

Rieva LesonskyCEO, GrowBiz Media
Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship. | @rieva | More from Rieva

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Discussion (1) Comment

  1. Rieva,

    I think you’ve hit the nail on the head. Banks are turning a blind eye to the value and need for growing businesses. While a business in “Maintenance ” mode is finding it easier to get funding, they are not big job creators.

    We believe that the people of Main Street can fulfill some of the lending needs for these growing, job creating businesses through our social lending network.


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