Depending on who you’re talking to, there will be those that claim there is no cost to them to acquire business capital and to others the costs is considerable.
I say that there is always a cost to find, arrange, and secure business financing.
On the no cost side of the argument, people with “A” credit who have always been able to get the financing they need through an institutional lender would claim that they never had to pay anything to locate or arrange the financing nor should they. For these individuals, I say good for you. But there is a cost of time, and business financing these days is tougher to get in place even for those of you with even the best credit and strongest lending profile. And if doing it all yourself gets the best result, that’s great… provided it didn’t take two years to accomplish during which time there could have been a substantial opportunity cost associated with not getting things in place sooner.
To me, biased as I am as a business financing consultant, there is a cost for locating and securing business capital no matter who you are. Even if you go to your bank tomorrow and get financing right away, there is no guarantee that its the best deal available on the market or even the best deal you could have secured with the time you had to work with.
And regardless of whether or not you pay a third party to assist you with the process, looking for business financing is still going to occupy your time and there is a cost to your time.
A better worded question would be how do you minimize the cost of locating business capital and get the largest possible benefit or group of benefits? Avoiding costs trying to understand and do everything yourself, especially in the world of business finance these days, just creates more cost in the long run.
And what’s hard for the average business owner to understand is that the landscape is continually changing so that whatever you thought you understood about finding and securing money for your business a few years ago may no longer be relevant.
It all comes back to how is your time best spent and, all things being equal, will you be able to figure out the best course of action that is actually cheaper for you in the long run compared to what others that work in the market every day may suggest as alternative approaches.
Regardless of what you’re personal belief system is on this subject, remember that there is a cost to this process and many times less investment in the process generates less results.