Today I’m writing issue #4 of my blog series based on the 2011 edition of the Top Ten Small Business Trends from Small Business Labs. I’m analysing these trends as they apply to entrepreneurs whose companies are whale hunters.
Trend #4: Alternative Financing. “While the improving economy is leading to increased small business access to financing from banks and other traditional sources, capital will still be tight in 2011. This will lead to increased use of alternative credit sources – merchant advances, micro-lending, community lending, crowd funding, factoring, etc.”
The financing trend begs for your attention. Micro-lending, community lending, and crowd funding only recently bubbled up as funding sources, fueled by the internet facilitating new markets where many small lenders contribute to financing an enterprise. Micro-lending is better known as a method to fund small, individual projects in developing nations than to fund established small businesses in major industrial nations. But as a whale hunter, you owe it to yourself and your company to learn about these sourves of capital should you need them.
Factoring has been around for a very long time but suffered from a somewhat unsavory reputation. Today, however, it provides a lifeline to certain types of businesses that have significant receivables from key contracts and who need cash up front in order to fulfill the contract’s terms.
What does this financial picture mean for whale hunters? Access to capital at certain important times in your growth process is critical for business development. Since many sources of conventional credit remain in short supply, it’s important to understand where new money markets reside and how they work. So do some online research or attend a seminar and bring yourself up to speed on what’s out there.
