New Source for Corporate Finance: Community

The recession is forcing many businesses to get creative with their financing. For many small and local businesses, the fact that the community banks themselves are having trouble with financing is putting the squeeze on their own projects. The fact of the matter is that entrepreneurs and other business people rely on banks for financing, as well as private investment. And with the economy in its present state, both of those sources of corporate finance are drying up. But this is where the creativity comes in.

Turning to the community for corporate finance

Business owners can find sources of finance through other means, if a certain amount of creativity is used. CNN Money has a great story about a business owner in New York who offered $600 in food credit for every $500 that residents put in to his restaurant.

You can use similar measures to raise money for your own business. Some businesses have offered special gift cards in exchange for a cash infusion, and others have even issued shares of stock that entitle the holder to dividends. This is additionally beneficial, since those who invest in your business now have an interest in seeing you succeed. And that means that you might end up with more sales as shareholders make it a point to buy your goods and services.

Image credit: Vincent Van Gogh, via Wikimedia Commons