Small businesses are struggling to access capital from banks to grow their companies and create jobs, despite government bailouts. Many small business owners are frustrated that banks are sitting on deposits and refusing loans due to stringent policies. Alternative sources of funding are being explored, such as angel investing with long-term "evergreen funding". New financing structures need to be created to empower entrepreneurs and stimulate the economy during this difficult time.

1. Entrepreneurs Unite!
© Preston Williams III Continued…
Many small businesses in America today are hanging on by a thread.
They are comprised of motivated individuals with great ideas about
ways to create jobs and lift the country out of this malaise and
economic nightmare. However, there is a severe lack of capital
available in the aftermath of one of the worse recessions/depressions
this world has experienced. Cash strapped banks having received
Bailout Funds are sitting on large deposits and refusing to lend. Small
business owners are frustrated because despite their best efforts to
maintain or grow their company, they are facing an uphill battle.
1. They are locked out from Bank Loans. Reasons given by the
banks:
A. They do not have a high enough Debt/Equity ratio to warrant much
needed capital advances. Money which they need in order to hire
adequate staff with the skills that will enable their companies to
successfully compete for international, federal and state contracts.
B. While several of them do not have any significant outstanding
debts, they also do not have a viable revenue stream. Their customer
base has been drastically decimated due to the recent global
depression. Operations cost far outstripped their revenue streams
and many have been forced to file for Chapter 11/13 bankruptcy.

2. ENTREPRENEURS UNITE!
© Preston Williams III Page 2 of 2
Even with well-laid recovery plans, several of these organizations
have not been able to emerge from bankruptcy.
2. While the United States Small Business Administration (SBA -
SBIR/STIR) is struggling to create financing alliances for struggling
start-ups and other small businesses, many of the cash rich financial
institutions who are recipients of Federal Assistance are unwilling to
stimulate the economy by lending to seasoned entrepreneurs with
established backgrounds / experience. Based on the much more
stringent (unrealistic) financing policies put in place following the
economic downturn, several companies are no longer eligible for
Letters of Credit or Letters of Guarantee.
Several of these companies are investigating new financing options
besides traditional banks & Venture Capital. Perhaps a new model of
Angel Investing with a commitment to "Evergreen Funding" will be a
good start. Meanwhile it is critical that they gain access to capital in
order to hire skilled Americans looking for work.
Observation:
This is a good time for innovative thinkers to create new funding
structures and financial instruments that will empower risk-takers in
our midst. Let us encourage entrepreneurs to deliver new services
and develop exciting products that will stimulate the imagination and
enhance the human experience.
--
Preston G.M. Williams III
M.Sc. • CPA • CIS
Senior Partner & CIO
GBC® Global Services
Information Technology Solutions
Internet: http://www.gbc-inc.net
Twitter: PrestonW
Date: November 11, 2010