by: Karen E. Klein

Monday, May 26, 2008

Dear Karen: I've been in business four years and need working capital to expand. I tried bank loans with no luck. Is there another way to get funding?

Answer: There are several alternative lending sources, including accounts receivable lenders, credit unions and micro-credit loans. You also could look into bringing in outside investors or a partner who would take a minority equity position in your firm. A merger is another possibility.

Your best bet will depend on your industry, your company and how much you need. If you're looking for $50,000 or less, you might qualify for a micro-credit loan from a local public economic development agency. Talk to your city or county business development office or search "funding" at buzgate.org, a small-business resource site. "There are subsidized loan packages tailored to small business, women and veterans," buzgate founder Deborah Osgood said.

If you have stable monthly revenue, investigate factoring or talk to your local credit union about a small-business loan. Angel investors, who typically look for deals of $500,000 and up, might be interested. And if your company is profitable and well-established, it could even be attractive to private equity investors.

Got a question about running or starting a small enterprise? E-mail it to ke.klein@latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.

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