BLS Managing Directors are frequently called upon to participate and assist with news and articles on economic development strategies, economic development incentives, site selection and land use strategies. Jay Biggins, Executive Managing Director, was interviewed and quoted in this article.
Businesses in all stages of development, from startups to publicly traded companies, need capital to grow and expand. A company's business plan, balance sheet, industry and even location can make all the difference between receiving the funding they need to grow - or not.
As everyone knows, cash from various sources was readily available in the late '90s and most of the 2000s, coming to a screeching halt in September 2008 when the real estate market collapsed and investment banking giant Lehman Brothers declared bankruptcy.
The good news is numerous financial services experts in the capital markets agree that 2011 has seen a marked improvement compared to the previous year - and are cautiously optimistic that this trend will continue.
Even in 2009, when capital sources virtually dried up, some deals with the right credentials did get financed. Today, more businesses are receiving the funding they need, due to a combination of smart business practices and taking advantage of numerous sources of capital from state and local incentives, federal government programs, angel investing, venture capital and, yes, even conventional bank financing.
In this article, investment experts detail some of today's sources of financing that businesses are using and share advice and best practices for those looking to access capital.
Types of financing available
With bank financing still difficult to obtain - or even out of reach - for many businesses, savvy firms are looking beyond big banks to track down these elusive dollars. While most of these avenues have existed for years, they have become more important in light of the past few years. These types can include incentives and public sector financing, privately held lenders, community banks, venture capital, angel investors, government programs such as those through the Economic Development Administration and Small Business Administration and for those who need equipment, leasing programs.
Incentives and public-sector financing
At the state and local level, economic developers are attracting business to their areas with incentives, which might include property tax abatement, payroll tax rebates, job training and cheap or free land, along with tax increment financing.
"Because companies are confronting a shortage of capital from conventional institutional sources, it is creating funding gaps. States and localities, if they want to compete for where these projects are to occur, are being creative and aggressive with gap financing to attract these companies," said Jay Biggins, executive managing director at Biggins Lacy Shapiro and Co., a firm that specializes in location economics, including developing incentive strategies. "This includes a wide range of different forms of capital, including grants, to offset or mitigate capital costs that would otherwise have to be privately financed at terms that might not be feasible," he continued.
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