Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

FORTUNE Small Business:

Finding funding when credit dries up

When banks aren't an option, consider alternative financing options that may work for you.

Subscribe to Top Stories
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
Your name:
* Your e-mail address:
* Your city:
* Your state:
* Your daytime phone #:
* Your questions:

(FORTUNE Small Business) -- Dear FSB: In today's market, how does someone get funding to purchase a $2.6 million project? Banks and lenders are so restrictive that it is virtually impossible to get that accomplished. Is there any way to get business-to-business loans done with high loan-to-value ratios? Thank you.

- Mike, Big Pine Key, Fla.

Dear Mike: Because $2.6 million is at the lower end of commercial-lending activity, Lois Scott, president of Chicago financial consultancy Scott Balice Strategies, suggests you look at alternative financing options.

A good place to start would be local sources of funding, such as community banks in your town, or state and local government-run economic development programs. Your local chamber of commerce might also be able to tell you where you can find financing in the area.

Jackie Harder, president of the Key Largo Chamber of Commerce in Key Largo, Fla., suggests the following capital resources:

Access Florida Finance Corp.
Florida Development Finance Corp.
Florida Export Finance Corp.
Florida First Capital Finance Corp.
Florida Small Business Development Center

Also, don't forget equity investment.

"Relatively small amounts, such as $2.6 million for a quality project, would be very attractive to equity investors in today's market," Scott says. "These days there's a lot of competition for equity deals, with a lot of bidders seeking higher quality with more consistent returns."

You can find local angel and venture-capital investment groups by typing keywords such as "Florida angel investors" into any search engine. Scott also suggests spreading the word among business associates, such as attorneys, accountants, and other referral sources. But don't forget that will likely mean giving up a share of your business, as the investor will expect either ownership or a hefty percentage of the profits.

As for business-to-business loans such as vendor financing, where the seller allows the buyer to pay in installments over time with interest, Scott believes that it can be a great deal if your seller is willing. So don't be afraid to ask. To top of page

What is your experience with business-to-business loans? What other financing options, including VCs, angels or bank loans have you tried? Give advice to other entrepreneurs by writing back here.

Get loans without a financial history
Getting a loan after bankruptcy
When venture capitalists hate your company
Finding investors: What you need to prepare
A business plan that will get you a loan
Photo Galleries
A look at Sears through the years Now Sears has officially said its business has an uncertain future, here's a look at photographs that documents the store's rich history. More
Coolest hotel bars for business travelers in 2017 CNNMoney asked a high-end concierge service for routine business travelers what hotel bars they'd recommend in 4 major U.S. cities. Here are the best spots. More
Top credit cards for business travelers 2017 Just like a pair of pants, there's no 'one size fits all' when it comes to the best credit cards for travelers. More