Matt Horne, Founder and CEO of DECO Windshields chatted with me yesterday in a Google Hangout about all things business finance. Matt has built a company that generates over $5,000,000 in revenue and had lots to say about money, business and the learning curve that he has had to go on to keep the doors open while dealing with massive growth. He used a term – “fringe bankers” – to refer to capital groups in the market that have been able to help DECO with their cash needs. I like the term and think I will be adding it to my vocabulary.
“I own a business and we need some money, can you help?”
“What do you need the money for?”
“Oh lots of things…”
“How long do you need the money for?”
“Maybe 6 months to a year”
“How will you pay it back”
“Well we are having a really good year and just seem to be a little short so we need to borrow some money to get over the hump”
This is the most common conversation I have with small businesses who are looking to borrow money. They do not always know exactly why they need money and are not able to articulate how they are going to pay it back. The most popular business loan request we get is for a business line of credit. The problem is that a business line of credit usually means “working capital” (see blog here). Working capital (and lines of credit) are very difficult to get.