By Joe DiNicola, Bank of America Practice Solutions Executive


Small business owners seemingly have endless decisions to make, whether they are getting their businesses off the ground or taking them to the next stage. With growth comes questions about how to staff and fund expansion, as well as when is the right time to pursue a loan. If it is the right time for your business, now more than ever there are a lot of options when it comes to getting the capital you need for your business. According to the latest Bank of America Small Business Owner Report, a growing number of small business owners applied for a traditional bank loan in the last year (24 percent), but nine percent turned to alternative funding sources.

There’s a lot to consider when deciding how to secure the capital necessary for your business, but with the right people and resources, it isn’t as daunting as you might think. I recently participated in a Google Hangout to discuss the current small business lending environment and what entrepreneurs should consider before borrowing. Here are some of my biggest takeaways:

  1. Ask for help. Mentorship is a critical component when preparing for the capital phase. Find out what worked for established peers whom you trust. Additionally, consider enlisting a CPA to help you in the process - according to the Small Business Owner Report, 73 percent of respondents sought an accountant or bookkeeper for financial advice.
  2. Negotiate financing. You always have the ability to negotiate deal terms, pricing or structure. Generally, you’ll have more room to negotiate if your FICO score is above 700. Whatever deal you strike, stay true to a payment plan that you can manage based on the cash flow of your business.
  3. Keep a potential interest rate hike in perspective. We don’t know when the Federal Reserve will raise interest rates, but it is just a matter of time. However, this isn’t necessarily a bad thing; higher interest rates are often a sign of a strengthening economy. Additionally, the increase will probably have little impact on your payments. How you choose to allocate the capital you receive is more important than a rise in interest rates. 

You can view the full discussion with myself, USA TODAY columnist Steve Strauss and tax and finance expert Barbara Weltman, moderated by CNBC contributor Carol Roth, by clicking here.

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