By Terry Benelli, Executive Director of Neighborhood Economic Development Corporation

It Takes Money to Make Money

We have all heard the cliché “It Takes Money to Make Money.”  I have done a little to research on the origin of the statement; it does not seem to be attributed to any one historical figure, philosopher, business mogul or average person trying to make a success of their business.  The statement does seem to based in reality; an investment of operating capital is required before a business can open its door on any given day, not to mention opening the door for the very first time.

The Best Case Scenario – A Bank Loan

A bank or credit union can most often lend money to a business at the lowest rate.  They have access to a large loan fund.  Some banks are certified to offer SBA Loans that are guaranteed by the Small Business Administration Department of the US Department of Labor.  Bob Hope, a comedian, once said, “A bank is a place that will lend you money if you can prove that you don't need it.”  Of course he meant this to be funny, but for anyone that has ever been turned down for a bank loan, it rings true and probably does not seem so funny.

What Should You Do If You Hit a Brick Wall? Translation: What should you do if you get turned down for a loan at a bank?

·         DON’T be discouraged, give up and get in further trouble

·         DON’T close your business or give up on your business idea

·         DON’T start to use credit cards to support your business

·         DON’T turn to a high interest, predatory type lender

·         DO look into Community Development Financial Institutions (CDFIs).