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Hidden Treasure

Your search for capital should start in the nooks, crannies, equipment and real estate your business already has.

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This story appears in the February 2002 issue of Entrepreneur. Subscribe »

In a cash-starved economy, many entrepreneurs are in the unenviable position of trying to improve cash flow while maintaining and even expanding market share. One way to alleviate the cash crunch brought on by lower-than-expected sales in a down economy is to sell your business's assets. It may be a quick way to raise capital and sustain cash flow, but experts caution against the dangers of the quick cash fix.

"It's important to understand the various alternatives, then survey your company [to determine] the most valuable and most liquid assets," advises William E. Swart, a Dallas attorney with Bell, Nunnally & Martin LLP who counsels entrepreneurs wishing to sell assets. According to Swart, most entrepreneurs can generate income from assets in three basic ways: sale/lease-backs of equipment or real estate, factoring of accounts receivable and licensing of a product or name. While each may provide the entrepreneur with a quick fix, each also has its own land mines.

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