Small Business

9 Paths to Growth Capital

2013 PROFIT 500 winners share proven financing options for growing businesses

Written by Staff

Growing companies have unique financing needs—and it’s not always easy to find the cash needed to bring a company to the next level. We asked 2013 PROFIT 500 CEOs to share their recommended ways to score financing. Follow their advice and you may get the money you need.

1. Show your banker some love

“One of the first things someone told me when I started a business was to get to know my banker when I didn’t need money. We’ve been super proactive about maintaining good relationships with our two banks. We take our bankers out for lunch—whether they want to go or not!”—DENISE TASCHEREAU, Fairware Promotional Products (No. 210)

2. Make ’em work for it

“We get the big banks to bid against each other for our business. We restructured as our company grew, and our credit union wasn’t comfortable with the volume of lending we needed. So, we asked three banks to make proposals and they came back with three significantly different offers. We chose the bank we did because of the credit facilities they were willing to give us, and the interest rates.”—ARI BURSTEIN, Marcon Metalfab (No. 435)

3. Eat what you kill

“We’ve self-generated all our financing. It’s all sexy to go out and want to get bigger, but I’m kind of old school. We use what we have to grow. Yes, it’s a slower climb, but I don’t have to worry about making payments to anyone at the end of the month.”—VINCENT FIORE, Partners in Credit (No. 182)

4. Put some thought into why you need it

“Don’t just raise money to spend money. Raise money for a specific requirement, with specific terms, and then get the job done.”—CAL FAIRBANKS, ComplyWorks (No. 220)

5. Hold bankers’ feet to the fire

“I dislike banks as a rule. My advice is to follow their covenants and what they’re asking for—but to use these as a challenge to get away from them.”—JON POLE, My Broadcasting Corp. (No. 232)

View the full 2013 PROFIT 500 or enter this year’s ranking now!

6. Get creative in stretching your payables

“When we get an invoice that’s payable within 30 days, we pay it on the 25th day with our company Amex card. That becomes due 30 days later, and we pay Amex in full, because paying just the minimum is what gets you into trouble. This way, I’ve stretched my payables to 55 days. But I’m collecting within 30, so I always have positive cash flow. Plus, we get the points.”—SAJAN CHOKSI, Innovative Vision Marketing (No. 253)

7. Consider BDC

“We raised some money with the BDC. I like the BDC because it feels like they are on your side. That sounds fluffy but, as a business owner, it’s nice to have these people guiding you through the process and helping you along the way.”—CHRIS MURUMETS, LOGiQ3 (No. 219)

“We’ve used BDC to fund product launches and sales efforts. A normal bank doesn’t try to make it work, in our experience.”—LEE VAN IDERSTINE, NewGen Technologies (No. 358)

“I’ve found the BDC to be more receptive to the needs of a technology-based company, even if you don’t have a lot of hard assets.”—DAVID CICCARELLI, Voices.com (No. 57)

8. Consider a credit union

“The credit unions listened to us in the beginning, when the chartered banks didn’t. We don’t use that credit union any more, because they could no longer handle our growing volume of transactions. So, we had to go back to the chartered banks. But our credit union was instrumental in getting us started.”—MATT MOULD, Sport Systems Canada (No. 293)

9. Spend what you get wisely

“Where people screw up is not where they get the money from, but what they use it for.”—IAN WALKER, Left Coast Naturals (No. 325)

How do you raise money for your growing business? Have you tried any of these strategies? Share your thoughts by commenting below.

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Originally appeared on PROFITguide.com
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