Capital Expansion


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Q: I am having problems obtaining expansion capital for my 2 1/2-year-old women’s sportswear and gift company. After having past financial difficulties, I find it almost impossible to obtain a conventional business loan. Where can I find angel investors or venture capitalists to invest in this growth company?

–Bernell Hooker, Milwaukee

A: Angel investors typically invest in start-ups, usually in return for a percentage stake in the business. On the other hand, a venture capitalist would consider companies with larger capital investments (than angel investors) in a growing enterprise. VCs usually rely on someone they know and trust in the industry to screen potential business investments, so it’s a good idea to tap as many resources in your own circle (bankers, attorneys, accountants) as possible, for leads and introductions.

The SBA’s Small Business Development Centers (800-UASKSBA; www.sba.gov) located in most states, are an excellent resource for information.

Michael Stamler, a public affairs spokesman for the SBA says, “past financial difficulties are not necessarily fatal to small business loan applications.”

For free business counseling, contact the SCORE Association 800-634-0245. The counselors can assist you in sorting through your past financial problem that may have prevented you from accessing capital.

 
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