Return to Enterprise Table of Contents HOW TO FIND THE LENDER WHO WAS MEANT FOR YOU Ready to go hunting for your own private lender? Good luck. If you spent a dollar mailing your business plan to each potential prospect, you'd need a $15,000 loan just to contact them all. The trick is to zero in on the most likely partners. Most lenders specialize in a particular region or industry that they know well--manufacturing, retailing, or technology, for instance. And while some relish the idea of lending to an untested startup, others won't touch a company unless it's been around for several years. DON'T DESPAIR. One way to improve your odds is with a go-between, such as a lawyer, accountant, or investment banker who knows the lending market and the appetite of each player. If you don't find a match on the first try, don't despair; a financier who trusts the go-between may well refer you to a lender who is more likely to take on your kind of company. The hope, says Nolan Lehmann, president of Equus Capital Management Corp. in Houston, is that the other lender will reciprocate. ''Even if it's someone who calls over the phone, we might try to refer them,'' Lehmann says. If you can't get plugged in to that network, try one of the Web's loan finders. These free, interactive searches are the financial equivalent of computer dating. You fill in the blanks and the service creates a list of potential lenders. Two of the more promising sites are America's Business Funding Directory (www.businessfinance.com), which claims more than 15,000 sources, and MoneyHunter's Golden Rolodex (www.moneyhunter.com), which boasts more than 4,000. By giving specific information on your industry, type of financing, size of the loan, and size of your company, you'll quickly pare the list to a manageable size. For instance, we asked Business Funding Directory what was available for a five-year-old publishing company with $5 million in sales and fewer than 50 employees that was seeking $1 million in asset-backed loans. The search turned up more than 100 potential matches, complete with contact names and telephone numbers. The list included giants such as GE Capital Small Business Finance in St. Louis, commercial credit specialists such as Finova Capital Corp. of Phoenix, Ariz., several big commercial banks, and a host of smaller lenders from around the country. The services say that they make an effort to screen out unscrupulous companies, but some slip through. Red flags include huge up-front fees. A few hundred dollars might be reasonable, says a spokeswoman at the Business Funding Directory, but a few thousand is suspicious. Ask for references, and be wary of funds that supposedly come from overseas. Verifying that the money even exists before you pay the upfront fees may be impossible. You might also try browsing the online roster of federally licensed Small Business Investment Companies (www.sbaonline.sba.gov/cgi-bin/print_hit_bold.pl/ sbainfo/fainv/ sbicall.txt). There's no search function, but the list is a gold mine of names, contacts, and the type of loans each prefers to make--well worth the effort of scrolling through. After all, a treasure hunt isn't supposed to be too easy. By Rick Green in New York Return to main story

Updated Feb. 19, 1998 by bwwebmaster
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