Five steps to financing a business; from start-up to growth, every business will eventually need a loan officer.

Author:Barbour, Tracy

Nearly 80 percent of U.S. businesses fail within in the first five years of hanging out their shingles, according to Mark Gregory, director of the Kenai Peninsula Small Business Development Center (SBDC). Not having enough finances is often a contributing factor, he says.

"Financial staying power certainly has a big impact in being able to subsidize a business in its down time," says Gregory, whose business experience spans eight years with the SBDC, five years as a bank manager and six years running a business. "An ability to remain knowledgeable about sources of capital and how to properly structure your investment is the key to being able to last through the ups and downs."

Whether starting or expanding, companies need access to adequate funding sources to ensure their success. Financing a business isn't a perfect science, but there are some fundamental steps owners can employ to ensure they have the financial wherewithal to support their operation. The key to garnering financing, experts say, is to know where and how to look.

Such resourcefulness is what enabled Rachel Fredholm, 35, and Matt DeSpain, 29, to launch the Juneau-based Alaska Zipline Adventures last year. The business partners and newlyweds conduct "glided" tours through the Tongass National Forest to thrillseekers who don a harness and hang suspended from cables high above the lush rainforest. Getting the business off the ground--pardon the pun--was a major challenge. The couple had saved half of the amount required to start the business, but needed help coming up with the rest. Jackie Stewart, director of the Juneau SBDC, helped them identify creative financing options to close the gap. They borrowed money from a close friend, worked off some of the costs, got part of the construction on credit and landed a secured line of credit--thanks to having a detailed business plan--with Wells Fargo Bank. "The business is doing excellent," DeSpain says. "We're gearing up for this summer."

Step 1: Establish a relationship with your banker

The first (and perhaps most logical) step to financing a business is to build a relationship with your banker. Even though a bank may not always be part of the solution, this step can be crucial and should take place before a financial need arises, according to Gregory. "I think it is important to understand who you're in business with," he says. "You need to have a relationship with your banker, so you can know each other well enough and to see...

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