Regulation and Finance in Starting and Growing a Small Business

This course begins by examining traditional and creative approaches to capital formation and start up financing for small business but is devoted primarily to life cycle financing that ties sources of equity and other funding to the stages of business development. The range of funding sources is broad.  It includes personal equity, individual retirement assets, equity and debt investment by friends and relatives, and commercial loans.  The range of funding also stretches to more complex sources such as venture capital, SEC initiatives making it cheaper and easier for small business to raise capital, and the widening of capital markets for small business because of small loan securitization and the global financial market. Also included, and of special importance, are  the SBA, other government programs, tax breaks, and other public subsidies aimed at encouraging the growth and development of small businesses in the United States, and increasingly, around the world. Practicality requires, however, that the course keeps substantial focus on bank financing and strategies for overcoming the problem of credit rationing.  Therefore, a rich set of funding types from commercial lenders is studied, including:  asset based loans, invoice factoring, purchase order advances, credit card receipt advances, working capital credit lines, and expansion, franchise, and inventory financing. Tied closely to this study are ways to moderate the personal risks to small business owners, family, and friends who are sureties on these loans.