Carlos Hank Rhon, Economists and Funding for Small Business

Economists rarely agree, but most will admit that small business is a driving force of the American economy and will be for many years to come. explains Carlos Hank Rhon. These entrepreneurial firms are built on the dreams and enthusiasm of people willing to take risks and in turn, providing stimulus to the economy. They do need funding to go from one level to the next and these may not necessarily be traditional banks or lending institutions. There are other options that can be considered, and a smart small business owner should consider as many as practicable.

Venture capital is one possibility. In these situations money is raised by granting cash in exchange for partial ownership of the company, which usually comes in the form of shares of stock. A word of caution, though, is a venture capitalist will play an active rather than passive role in the management company. That is not always a bad situation as many venture capitalists bring with them a wealth of experience and advice far more valuable than their investment in your business.

Government is also a source for financing and the Small Business Administration (SBA) is an excellent source, notes Carlos Hank Rhon. The Administration has a number of loan programs for which a business owner might qualify. There is an application process and funding is not necessarily a given, but it is usually easier to secure a loan from the SBA than a bank. State and local departments of economic development might also have resources available for funding.

A small business owner should of course have strong financial records and balance sheets to suggest continued success. Yet at the same time this person shouldn't feel he or she is restricted to local banks alone. Possibilities are all over for securing funding and with a little homework the small business owner may find exactly what is needed to expand an already successful operation.