Financing tips for a recycling company
Find the investment group that's right for you and learn how to grab its attention.
(FORTUNE Small Business) -- Dear FSB: I am getting ready to launch and I need someone to finance my recycling business. I'm particularly interested in the area of government surplus copper.
- Richard W. Oldham Sr., Caneyville, Ky.
Dear Richard: The Environmental Protection Agency (EPA) offers a free online resource to help you turn used copper - or any type of recyclable material - into gold. It's called "A Financing Guide for Recycling Businesses: Investment Forums, Meetings and Networks".
The guide is designed to help recycling businesses identify sources of capital and "foster awareness of these opportunities among financiers," says Roxanne Smith, an EPA information officer. "It lists ways for entrepreneurs and economic developers to identify a wide range of potential financial partners for recycling companies. It focuses primarily on private equity as a source of financing. For example, it describes how to set up recycling investment forums, and lists dozens of existing investment groups."
The guide covers everything from why you need a business plan (it even gives a sample table of contents for a recycling company's business plan) to tips on how to polish your presentation at a financing forum.
The guide also provides financing contacts by region, so the southeast list would be a good place to start hunting down leads for a Kentucky-based venture.
For more guidance about how to structure your business, you need to start at a "very local level," says Kate Krebs, executive director of the National Recycling Coalition, a Washington, D.C., nonprofit recycling advocacy group.
"First, check with your solid waste department, typically in the public works department of your local government," she says. They will explain the local rules for collecting recyclables either from government agencies or private residences and businesses. You can also get information you will need about licenses, bidding processes and so on.
For funding leads, Krebs recommends calling the economic development department of your local government.
"There might be financial incentives available to a new entity for recycling," she says. "Typically, though, economic development funds are available for the end-use or manufacturing side of the recycling business infrastructure - i.e., the company that uses recyclable paper to manufacture new paper or products."