Trade Credit and Commercial Finance Companies to Financing Your Business

Trade credit may be available if you approach your suppliers in a businesslike manner. They want new customers just as much as anyone else, but don't want to be reckless in their credit policies. Treat them with the respect you treat your banker or other outside investors with, and you will secure some credit from them. This may be for a modest amount at first, perhaps no more than extended dating on small orders, but as you develop a history of prompt payment with your vendors you may be able to get a significant amount of your financing this way – not at start-up though.

Commercial finance companies are a good source of financing for new businesses. Visit (www.scoredelaware.com/financing) for a clear short article on commercial finance companies. (SCORE is shorthand for Service Corps of Retired Executives, another SBA program to visit). Some familiar commercial finance companies include The Money Store, CIT Financing, and TransAmerica. Most major banks have a commercial finance company (for example, Fleet Financial Company). Look in the Yellow Pages. These companies are set up to handle more risky loans than banks are comfortable with, and can provide you the capital you need to get into business.

Equipment manufacturers are eager to develop you into a bigger and better customer. If your venture will need a substantial amount of equipment, look into this kind of financing. Suppose you need 10 personal computers and a server to launch your e-business. You could presumably pay $25,000 out of pocket (mainly for the server and licenses) or lease the equipment (small down payment and a fixed monthly payment thereafter) or finance it through a captive finance company. The decision is partly dollars and best suits your business and its prospects. A captive finance company is one owned by the manufacturer. They can take more of a risk than other lenders, but have to charge for it.

If a man look sharply and attentively,

He shall see Fortune,

For though she is blind,

She is not invisible.

-Francis Bacon-