Tug-O-War

Q: Can I find capital online?

A: Yes, but I'll tell you from my own experience that while business owners can leisurely surf the Internet seas, scanning the horizon for capital, lenders must slog through a swamp of prospects to find just one capital-worthy company. As a onetime subscriber to a prominent online capital search engine for two years, I was obsessed with checking my e-mail almost hourly to find customers seeking capital. I endured the rolling eyes and heavy sighs of my wife and partner, who eventually balanced the infinitesimal amount of income generated by this activity and what my time was worth and informed me that I could either cancel my subscription or pay her $250,000.

The biggest problem I saw with the online capital search was that the anonymity of the Internet took accountability out of the equation and opened the door for less-than-accurate information, thus adding the labor-intensive step of lenders having to find information themselves to make proper credit decisions. That makes lenders wary of the process, but it doesn't mean online capital searches won't help you.

Begin your hunt on any of the capital search engines, which can help you narrow your search and compile a list of prospective lenders who are focused on your type of business. You can then contact each lender on your list either directly or through its Web site and fill out applications tailored to their needs. This gives you the luxury of quicker responses and may garner callbacks from real, live lenders. You'll have to deal with them in the end anyway-after all, they, not your computer, are still cutting the checks.

Doug Hood is co-founder of Rainmaker Capital Corp., a capital acquisition consulting company in Cartersville, Georgia. Co-founder Marilea S. Hood contributed to this article. Send questions or anecdotes via e-mail to doughood@rainmakercapital.com.