SBIC’s are very viable alternatives to companies that are too big for individual investors to small for venture capitalists. As such, you should contemplate working with these private investment firms in lieu of working with an individual funding source. Angel investors love to work with businesses that are already profitable. The capital you receive does not require that you give any equity to a third-party investor. There are number of differences between working with angel investors versus working with SBICs. When seeking private investment, you will need a well developed cash flow analysis which is often more important than your profit and loss statement. If you’re seeking to acquire real estate may be in your best interest to work with the small business administration rather than a private funding source or SBIC.
If your business is not recession proof, then you may have a significant amount of trouble obtain the capital that you need from an angel investor or SBIC. You should sharpen your ability to convey your idea to any potential funding source so that they can clearly understand exactly what you intend to do with their capital, and this is especially true if you intend to work with a small business investment company.
Businesses that are economically you can use some recessions, such as medical businesses are particularly popular among angel investors. Before seeking outside capital, you should always consult with a certified public accountant. SBA loans, unlike equity, requires monthly repayments of principal, which may be a good alternative than selling a substantial equity stake in your business to a third party.
Preferred shares typically do not allow angel investors to have a say in the ongoing management of your business, but this type of financing is usually very expensive. SBICs may seek a provide you with both debt and equity capital. It should be noted that a private investment firm can fire you at anytime. Angel investors usually ask for less equity than a small business investment company. Your business plan, especially that’s going to be presented to an angel investor or SBIC, should be a scientific document that showcases why this is a good investment for the individual financier.
Your CPA will be able to provide you with all the necessary information related to the cost of the associate with the capital that you are seeking. Finally, it should be noted that small business investment companies are licensed and regulated by the Small Business Administration. As such, you will have a significant ability to negotiate with these firms on an ongoing basis.