How to Get Business Funding for Your Business?

Published: August 30, 2021

Small Business Funding …

How to Get Business Funding for Your Business When The Banks Say NO?

Business owners are aware of growing their business; they need capital, short and long term. The adage that cash is king is as true today as it ever has. Lines of credit, operating capital, and other financial instruments are vital in today’s business climate and are one of the reasons why so many businesses fail; the lack of money. So knowing this, my agency’s purpose is, for the most part, is to work with small businesses that have been around for one year and have sales at $10,000.00 plus per month. And can be around for that 5-year time clock that states better than 50% of businesses that start will fail within this period.

Donald E. Mitchell Agency, Inc. works as a marketing and small business consulting agency and has developed contracts with alternative funding groups that supply the capital to small businesses. The data provided in this blog is from one of our principals, whom we work with to offer money to our clients. We will not mention them by name; however, all the information is listed on their blog and website. If the time comes and an agency agreement is signed, we have no issues in divulging their name

Question; Why do Banks Say NO?

Banks traditionally were the source of lending to small to midsize enterprises; however, since the “Great Recession of 2007-2008.” Banks have slowed their process of lending money to this group. Although economists have unanimously agreed the recession is over, these institutions have not brought the pace of lending before the 2007-2008 recessionary period. With that said, why are banks still not lending to these organizations?

One arguable reason is that it takes the same amount of time to develop a $100,000.00 loan as it does a 2 million dollar deal, so banks are more profitable with doing business with the more prominent organization than the smaller ones. Then two other reasons can be labeled for not lending to this group: explicit and implicit factors. From the explicit side are ten areas that one can look at that can be reasons not to lend: (1) low personal credit scores on the entrepreneur.

 (2) Not enough business history (3) low business credit score (4) inadequate cash flow (5) insufficient collateral (6) inadequate or incomplete business plan (7) lack of owner investment (8) too much debt (9) industry deem to be too risky (10) loan officer has no expertise in the industry. Then you have the explicit; now, these are the ones the bank keeps hidden from consumers’ knowledge.

Debt and Equity Financing


Hence, when it comes to funding a small business, there are two ways entrepreneurs can choose; the first is debt, and the other is equity. At the same time, debt is repaid with interest to the organization’s provider of capital or money. The acquisition of this capital can come with strings and prevent the entrepreneurs from taking advantage of future opportunities outside the realm of their core business dealings. Thus, lenders look favorably upon a low debt-to-equity ratio; this will benefit the organization and increases their chances of acquiring more money in the future if needed.

There are advantages of entrepreneurs utilizing debt as an option to raise capital; one is, the lender does not have any control in the business, and once the money is repaid, your affiliation with the lender ends. And the interest on debt financing is tax-deductible and simpler to forecast expenses due to loan repayments do not fluctuate. There is a downside to debt financing; this financing is a bet on the companies future, and if there is any downsizing of the company, this will put the company in peril because the firm now can not grow, or the growth stifled. Nevertheless, the debt is expected repaid to the lender at all costs.

In conclusion, if you are an LLC or another entity that provides separation between you and your business, the lender will most likely ask you to sign a guarantee of repayment. Thus, again goes to the grain on why you have an LLC or other separators from one personal finances. However, this practice is commonly used in small businesses. However, in larger organizations, this practice is not a burden of the principals.


The difference between equity and debt is that the entrepreneur gives up equity interest or shares in their enterprise. With that interest also come giving up some decision-making as well. Hence, unlike debt, there is no timetable for repaying the investment from the shareholder. As long as the shareholder is not compensated, the entrepreneurs do not have complete control or ownership of the business. For they have a partner or partners and must be involved in the decisions.

Entrepreneurs have many reasons to prefer to sell shares of their stock to raise capital for their company. Some of your largest organizations have sold stock for growth, purchased equipment, or raised money for needed inventory. Equity is used at the beginning of the enterprise at startup or several times later for massive commercial undertaken where debt would be riskier to investors.

The purpose of equity financing for entrepreneurs is the removal or a timetable of the obligation to repay the money received from investors. Entrepreneurs want to be successful and return equity investors with a good return on their money, although without some required payments with debt financing.  

Concluding Remarks

Entrepreneurship is the epitome of the American Dream of owning a business and the entrepreneur making the decisions that they feel will benefit them in building their new business and being profitable. Entrepreneurship is a risky career for the entrepreneurs put all on the line for this enterprise’s building and future profitability. The entrepreneur invests their own money or capital with friends, family, and other investors to launch the enterprise.

One of the reasons entrepreneurs fail is their inability to raise needed capital for the continuous operation of their business until sales have surpassed expenses. Once this happens, sales exceed costs; then, the enterprise begins to make a profit. One of the reasons for operating their own business is to provide them with a better lifestyle than if they were working for someone else.

The freedom, building an entity that can pass down from generation to generation, and providing wealth to those generations is an exhilarating thought, and achieving the same is a feeling few will ever realize. So the issue is, do you have what it requires to be an entrepreneur?

About the author:

Dr. Donald E. Mitchell holds a doctorate in Entrepreneurship and Business Management works as a Small Business Consultant specializing in alternative financing, digital transformation, digital marketing, e-commerce, website development, and management software. He has offices in Southfield, Michigan, Chicago, Illinois. His primary focus is on small business organizations.


 Based on several articles that have been published and cited through this article by the author. The author’s beliefs are personal and reflect his worldview and experience in the issues and practices mentioned. The author used some portions of the business plan were from his doctoral dissertation, Entrepreneurship in the 21st Century the business plan.

 If you are a business owner and need quick access to unsecured operating capital, Click Here to apply. Must be open and operating for at least 12 months with monthly sales of $10,000 or more. Toll-Free (866) 400-3040 email:


Addresses: 25 E Superior St Suite 2801

Chicago, Il 60611

2000 Town Center 19th Fl. Southfield, MI. 48076

The best way to communicate with Dr. Mitchell is through email;

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