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» Generating Business Operating Capital

Posted on 5/1/2005
The hardest part about starting or operating a business is cash. That statement should easily win me the Understatement Award of the century, let alone 2005. Poor cash flow can shut down an otherwise profitable business more surely than any other business trouble. The problem with starting a business is that it takes capital and no one is willing to lend on a business that hasn't begun. (The days of easy Angel Investment are really over, folks). The problem with a business that has run into cash flow problems is the same - no bank will lend when you need it. You'll need to look to other sources to generate capital.

A little like robbing Peter to pay Paul, look to collateralize what you do have or can get, to generate captial to do or to buy what you cannot get funded for. The first stop is real estate. If you  have some, use whatever equity you have in it to generate capital for other business ventures. If you don't, investing in real estate, fixing it up and selling or renting it out is still one of the surest ways to generate cash. Expect to spend 1-3 yrs to generate a significant sum. Take care of your credit scores along the way. The better the score, the less costly the loans to buy and rehab real estate will be and the more likely you will be able to borrow again later for the business venture you have in mind.
Posted in Miscellaneous