August 8, 2007

Raising Capital: A Smart Way To Create More Customers

If you’re selling products and services, one way of raising capital would be to help your customers get the money to buy your products. Think about this: If you sell a large piece of equipment that costs a million dollars, and your customer doesn’t have a million dollars, and your customer’s bank doesn’t want to give him a million dollars, you might have to come up with a financing alternative to help him get the money so you can make the sale.

When one of my clients was faced with a similar scenario, the main issue was that the collateral (i.e. the equipment) wasn’t something that the bank understood. We had to find a bank that was comfortable with the collateral and willing to make a commitment to it. Fortunately, after some effort, we managed to acquaint a nationwide institution with the collateral, and they agreed to lend the money or lease the equipment to them. As a result, this meant that the company could sell its expensive pieces of equipment.

This was actually a form of raising capital. It’s not the same as fundraising for a startup, but it provided the funding to allow the company in question to grow.

The reason I want you to have this background is you will inevitably find yourselves in situations in which you’ll have clients who will need money to buy your services. If you encounter such situations, I don’t want you to stand there like a deer in the headlights. I want you to know about some of the options you have in regard to funding so you can grow your business.

About Joel G. Block

Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. He once raised $10 million for his own startup company and later chose to sell it to the Los Angeles Times. Would you like to get a private phone consultation with Joel? Visit www.joelblock.com/capital for details.

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