Financing is almost impossible to get right now. In some cases, that's not a bad thing

September 08, 2009

By Megan Erickson (View author info)

Despite the current clamor for loans, business owners would do well to remember that money is not the mother of invention. On the contrary, capital constraints often spur innovation. Historically, scarce capital has forced many businesses that were founded during downturns -- such as HP (HPQ, Fortune 500), which debuted in 1939 during the Great Depression, and FedEx (FDX, Fortune 500), launched in the oil crisis of 1973 -- to eschew debt and remain agile.....Small business owners should do as much as they can without relying on other people's money, recommends Jim Anderson, an Orange County, Calif. counselor for SCORE, a national nonprofit organization that teams successful small business owners with entrepreneurs who are seeking advice. "People who self-finance generally don't become sloppy," he says. "There is a tendency for people who have borrowed a big chunk of money to relax."....... Some entrepreneurs can take on loans without losing their innovative edge, particularly if they're armed with specific plans for spending the cash and generating enough revenue to pay it back. For everyone else, the era of lazy borrowing is over....In the end, a loan is a debt, not an excuse to let your hair down and party. Note to Wall Street: That advice isn't just for entrepreneurs.

Instructions:

Click here to find the remainder of the article