NASE Blogs

Borrowing vs. business model

May 08, 2009

Posted by Molly Nelson - With banks and regulators more concerned with balance sheets than lending and the news that according to the federal government, Bank of America needs to raise a $33.9 billion cushion in case of any further economic downturn, it looks harder and harder for small businesses to gain access to financing they need.

What is a business owner to do?  According to a New York Times interview with Doug Tatum, a consultant specializing in the finance issues faced by growing companies, business owners need to stop thinking about borrowing money.

Money quote: "Entrepreneurs have a limited amount of bandwidth, and they have to quit wasting their time chasing the impossible. They need to think about how they can change their business model to become profitable. That’s where the capital to grow will come from."

Do you think Tatum is right? Are you making changes to your business model instead of pursuing loans?