Itsy-Bitsy Bonds

On the Make

Even with mini-bonds' new flexibility, IDBs are not for everyone. In general, if your company is a manufacturer or a processor of tangible personal property, and if your project involves the acquisition or construction of assets related to manufacturing or processing (such as the purchase of land or equipment), then you are eligible.

Don't assume from looking at these constraints, however, that you're automatically ineligible if you don't obviously fall into one of the listed categories. You might be surprised who is considered to be a manufacturer. Palank tells the story of a phone call he received from an entrepreneur who "manufactured" ice. Skeptical, Palank checked around and found out that the ice-making entrepreneur did indeed fall under the manufacturer classification and was therefore eligible to be an IDB borrower.

Remember, however, that although the mini-bond program is geared to entrepreneurs, you're still expected to present the traditional touchstones of creditworthiness: a strong balance sheet, adequate collateral and acceptable loan-to-value ratios.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the January 2002 print edition of Entrepreneur with the headline: Itsy-Bitsy Bonds.

Loading the player ...

5 Secrets for Making Your Logo Stand Out

Ads by Google

Share Your Thoughts

Most Shared Stories

15 Signs You're an Entrepreneur
Richard Branson: 'There's No Shortcut or Magic Recipe to Success'
The 7 Most Powerful Women to Watch in 2014
6 Ways to Improve Your Conversations
The Most Expensive Domain Names in Internet History