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How do Small Business Owners Seek Capital For Their Business?
March 1999 — One of the first steps an entrepreneur must take when starting a business is obtaining capital. The process of securing capital The average amount of time it takes for a small business owner to secure capital is one to six months. The results show that a significant number of respondents (37 percent) were able to raise capital in one month or less, and it took 27 percent of respondents two to six months to raise needed capital. When asked what financial sources provided the capital, respondents unanimously selected three main sources: banks, venture capitalists, and individual investors. Credit cards were the secondary source of financing. Respondents were also in agreement about whom they seek out for advice. Nearly half of respondents would go to a bank/loan officer for advice, whereas 35 percent of respondents seek out friends and family. After accessing these two resources, survey respondents would ask advice from accountants (32 percent), SCORE counselors (26 percent), lawyers (19 percent) and financial advisors (6 percent). Regardless of how and when entrepreneurs secure capital for their businesses, the majority of owners (90 percent) did indicate that they expect to pay back their loans on time.
Click here to view the results of previous surveys.
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