The first paragraph of this article provides a succinct summary of its content. It explores the concept of using external financing, or other people's money (OPM), to fund and expand your business. This strategy, employed by many of the world's wealthiest individuals, involves leveraging borrowed funds for high-yield investments, asset creation, or business growth. The article also highlights the benefits of using OPM and provides resources for obtaining such funding.
"Money is a terrible master but an excellent servant," said P.T. Barnum, a sentiment echoed by 17th-century author John Ray, who penned the phrase, "Money begets money." In the realm of business, it's often said that you need money to make money. While there are numerous sources of capital, one of the most effective for business growth is leveraging other people's money.
Many of the world's wealthiest individuals have amassed their fortunes using OPM. This strategy involves using borrowed funds to generate returns, create assets, or expand a business. The benefits of using OPM are twofold: firstly, any debt incurred is assigned to the business, protecting personal finances; secondly, the influx of capital provides the means to generate further income.
Despite the prevalence of lending institutions and venture capitalists, securing OPM can be challenging. However, an often-overlooked source of such funding is the federal government, or what I like to call "other taxpayers' money" (OTM). The government allocates millions of taxpayer dollars to fund businesses, and many entrepreneurs fail to take advantage of this resource.
Here are some excellent sources of OTM:
The Small Business Administration (SBA) offers training and funding for entrepreneurs. Visit www.sba.com for more information.
The Export-Import Bank of the United States and The Overseas Private Investment Corporation (OPIC) provide funding for businesses looking to export and sell products overseas. Visit www.exim.gov and www.opic.gov respectively.
Procurement Assistance Offices can help businesses secure government contracts. Visit www.dla.mil for more information.
The Small Business Investment Company (SBIC) provides venture capital for new and existing businesses. Visit www.sba.gov/INV for more information.
For free assistance with personal or business taxes, visit www.irs.ustreas.gov/prod/bus_info-bus_help.html.
Additionally, the free online book, "The Credit Process: A Guide for Small Business Owners," provides valuable information for first-time financing seekers. It covers various topics, including types of financing, business plan preparation, loan application processes, and actions to take if a loan is denied. It also includes a comprehensive glossary of finance terms, agencies, and fair lending regulations.
