Funding Options and Expert Advice from the SBDC Regional Director
Navigating Debt, Equity, and Non-Traditional Funding Pathways
Publication Date:December 31, 2024
David Noack serves as the regional director of the Small Business Development Center (SBDC) in Eastern Idaho. Over his 24-year tenure, he has supported more than 3,000 businesses across nine counties in Idaho. The SBDC, a federally funded program in partnership with the Small Business Administration (SBA), is dedicated to empowering small businesses to thrive by providing free resources and support to entrepreneurs. While the SBDC does not directly offer funding, it plays a crucial role in preparing business owners for funding opportunities and connecting them with the appropriate networks and resources.
These insights are taken from episode three ofEntrepreneur Voiceswhere David joined as a guest to share how to navigate the funding landscape and build a successful business. The full episode can be listened to on Spotify or YouTube.
The intended audience for this paper includes aspiring entrepreneurs, small business owners, and individuals seeking actionable insights on funding strategies and business growth.
It describes the key funding options available to entrepreneurs, including debt, equity, and non-traditional pathways, as well as expert advice from David.
David’s Entrepreneurial Background
While completing his college education, David worked in construction, framing houses, and later graduated with a degree in landscape design and nursery management. Following his graduation, he worked in minimum-wage positions before deciding to pursue entrepreneurship. He established a pest control business and simultaneously earned his pilot’s license, which led to the purchase of a small aircraft manufacturing company. Under his ownership, the company achieved top industry ratings. Additionally, he founded a construction company, managing all three businesses concurrently during this period of his career.
David’s experience managing three businesses often involved working closely with investors. However, he was initially unaware that one of these potential investors had a history of engaging in hostile takeovers. This partnership brought all three of his businesses to the edge of bankruptcy. Determined to find a solution, David dedicated himself to learning how to restructure his businesses effectively, discovering the value of shifting from people-dependent to system-driven operations. His efforts resulted in saving all three businesses from failure. This pivotal experience led David to pursue a consulting role, where he helped other struggling businesses implement strategies for recovery and long-term success. Years later, he decided to return to the western United States and applied for his current role with the SBDC.
Key Takeaways and Tips for Entrepreneurs
There are Two Types of Funding: Debt and Equity
Debt is when someone lends you the money and you must pay it back. You retain complete ownership of the business.
Equity is when someone gives you the money in return for a percentage of the company.
Research the Funder Before Asking for Money
Start with the Business Model
Customers Buy from the Heart
Banks Often Only Look at the Executive Summary
Be Willing to Learn
Look into Non-Traditional Funding
Angel Investors
Captial investors
Strategic partners
Foundations
Fools, friends, and family
Referrals
Credit cards
Refinancing
Restructuring
Downside-to-upgrade
Selling assets
Borrowing against cash value of life insurance policies
Home equity lines
Partner funding
Accounts receivable
Factoring
Crowdfunding
Co-signers
Peer-top-peer
Grants
Microloans