Q: In this climate, where can people go to get the money they need for their business? I want to expand but the banks all say no. I can't even imagine what it would be like if I was looking for start-up capital. What are we supposed to do?
A: I have the proverbial good news/bad news for you. Let's start with the bad news:
There has probably not been a more challenging time in generations for entrepreneurs insofar as business financing goes. All of the old sources seem to have dried up, almost overnight.
Take for example the home equity ATM. I have a pal who used to run her business like this: When times got tough she would use her credit cards, running them up and almost maxing them out after two years or so. Then she would refinance her home, take out $25,000 or so (the amount the house would typically appreciate over that time) and pay off the credit cards.
And then she would start all over again.
She must have done this four or five times for the 15 years leading up to the housing crash. I am sure she is not alone. But the era of so-called 'easy money' is long gone, for her, and everyone else. So the bad news is that these are indeed the tough times for many businesses wanting a loan.
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