Posts Tagged ‘Banks’

How often have you heard … if you need production funding, go to a bank? Well, banks and entrepreneurs just don’t work. Banks look for steady growth, and entrepreneurs by definition either grow explosively or die, but steady growth isn’t entrepreneurial. So, where does an entrepreneurial high tech engineering/manufacturer go for funding? Pretty much limited to venture capital. And where do you think venture capitalists go when the economy isn’t good? If you can tell me where they hide, let me know!

One of the most basic obstacles facing high tech engineering/manufacturing US-based companies is lack of capital. I think the feds know that, however their answer shows just how little they know about this business sector. Our government set up an agency called the Small Business Administration (SBA). And guess how this agency doles out money? Through Banks! The SBA claims they are understaffed and as a result depends on the qualification and eligibility programs instituted by local banks to qualify an entrepreneurial company for an SBA loan. Another government system that is broke!

It would be great if our government can figure out a way to directly fund small entrepreneurial high tech engineering/manufacturing companies without depending on banks. Interesting note, one Florida based bank requires a minimum of 3 years exponential growth before even considering a loan application, and by the way, that loan would be with a personal guarantee by the owner or owners of the company. According to the banker, the only companies they have even considered were legal/attorney firms. There’s an example of a service sector business that does well regardless of the economy!