For many in the US and around the world there are few ventures as exciting as starting one's own business. It is a fact that wealth in the US and around the world is created through the inception of a new enterprise. As stated previously although many may fulfill their dream of turning an idea into a reality, the majority of these new companies will fail within the first few years and while poor management is certainly a factor, statistics show that it is the lack of capital or access to it that ultimately is the downfall of most new organizations.

That said let's look at a simple coffee shop. A gentleman saves his money, and decides to start a coffee shop, he accesses his retirement account in order to get it off the ground. Finding a location is just the start, he must then purchase the necessary equipment and build out the interior of the restaurant to conform with a successful look. Next he will need signage which can cost upwards of $10,000, then there is marketing and advertising costs. By the time his location is built out and ready to open the doors. He notes that he has already invested over $100,000. His first 6 months go well as he makes back some of the money he had invested, but due to some economic shifts in months 6 through 9 he only breaks even those months which doesn't help to pay the owner's personal bills. Without access to lines of credit and commercial loans by month 10 the owner can no longer make his payments on his lease and his personal bills. What did the business owner do wrong, why did he fail within the first year?

By all accounts he did his due diligence on advertising and marketing, he had a quality product and chose a prime location for his enterprise, so what could he have done differently to have been successful? According to the National federation of independent biz 86% of corporations require financing and credit to survive which means that the owner in this example may not have necessarily made any big mistakes with his endeavor as he just went through a rough patch that coincided with the local economy faltering and the only way he could have survived was to have already secured financing for such a slow down.

When an entrepreneurial individual starts a business contrary to popular belief there are actually alternative corporate lending programs available for new organizations in nearly every industry. Knowing where to go and how to access this capital is often the difference between success or failure for the new undertaking. In addition to accessing the right programs it is essential to understand that companies can develop their own credit profile and credit score with the commercial credit bureaus which are: Dun and Bradstreet, Experian Biz, and Biz Equifax. Had the owner developed these corporate credit profiles and scores in the first 6 months then he would have had the ability to secure lines of credit to pay for supplies and to have access to cash to get through the slow times which will inevitably hit any enterprise. The moral of this story is to work with a commercial finance professional to secure the corporate loans that are not needed today, but will certainly be needed tomorrow. By also building a commercial credit profile the company will be in a position to obtain its own financing regardless of the personal credit score of the owner.