Read “Spank The Bank” to Choose the Right Financing for Your Business

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spank the bankIt was just a couple of years ago that I lamented about the lack of finance guides aimed at small business owners. Meanwhile, the number of non-traditional finance resources has increased, competing with traditional banking sources.  As a result, business owners have clamored for books outlining all finance options available.

Among the most stellar coverage of small business finance resources is Spank the Bank: The Guide to Alternative Business Financing.  Karlene Sinclair-Robinson (@KarleneSinRob), founding member of finance consultation firm KsR Solution LLC, wrote the book to deter small business owners from pursuing poor business models that never get proper capital.

Her expertise in handling millions in non-traditional financing and research on the subject has crafted a sensational finance guide. I discovered the author through a Twitter chat and asked for a review copy.

A Signpost on the Many Highways of Finance

Spank The Bank covers the latest finance instruments such as peer-to-peer lending and crowdsourcing, as well as traditional financing services such as business credit lines, asset-backed loans and factoring.  What makes the book a unique guide is how it outlines these resources.   With each financing option, Sinclair-Robinson explains the pros and cons, along with what to do in your business prior to selecting a choice.

Using asides called Biztips, Sinclair-Robinson highlights the “so-what” of the information provided. For example, the first chapter details the business structures available, with a reminder as to what is at stake when selecting a structure:

“Many funding sources will not work unless you are formally registered your company. They prefer that you do not operate as a sole proprietor.”

One great aspect of the book is that each option is fit against the kind of businesses that would pursue an examined option. Cost is considered, as well as term definitions associated for each subject.   In fact, a terrific aspect is that the definitions are lengthy enough to appreciate what to expect with a choice.  Take the explanation about Purchase Order Financing (POF); there’s a context about the type of risk being considered with POF:

“When you consider Purchase Order Financing and Factoring, always keep in mind the ‘number line.’ You have a positive and negative side… Purchase Order Financing is on the negative side or high risk, for the main reason that the lender is providing funding for you prior to any work being done or any tangible product delivered.”

Sinclair-Robinson then follows up with key takeaway of what to expect with POF:

“The fee for using this financing service will be much higher than most but the key will be for you to price your product correctly, deliver it in a timely fashion and keep your customers happy. It’s important that we not just look at how much things cost but also at how they can help enhance what we are doing.”

Learn Finance Facts Instead of Myths

Sinclair-Robinson also dispels widely cited myths, such as free business grants or that the SBA issues business loans.  You’ll understand what resources matches to your business.

The chapters are brief, so you may weigh the information value against the nature of the topic. The chapter on venture capital is nowhere near as detailed as David Gladstone’s Venture Capital Investing, for example. But the information would give your business the right starting point for appreciating the difference of VC investment against another financing choice.  Plus, if you are using an accounting system, the topics in Spank The Bank will help you frame what accounting metrics and concepts need scrutiny and potential improvement.  You’ll get an idea of what to work in on. Cases, recommended reading and sample forms round out the guide.

Such comparisons are what Sinclair-Robinson intended.  She succeeds at every effort to make information accessible to all small business owners.  In reviewing each chapter, I felt that the explanations were as straight-forward for the electrician contractor as it would be for a professional looking for a few pointers.  Both business people would make confident decisions after reading this book.

I also liked how Sinclair-Robinson ties other business aspects into the financing decision.  My personal favorite is the reference to an online presence – bet you had not considered how much your website is a factor in finance. Read this 9th myth from the Business Financing Myths and Misconceptions chapter:

“The thought that you do not need a website in today’s technologically and internet savvy market must be reconsidered. If you have operated without one, you could lose potential business, credibility, and more….Bankers might not care too much one way or the other, but unfortunately it is a problem for alternative financing sources.”

We’ve seen a few good books on specific details, such as local investment options in Locavesting or wealth creation in Wealth Creation for Small Business Owners. Few books covers finance details with the scope Sinclair-Robinson has provided.

Spank The Bank is a winning addition to the business library. It will help many small business owners craft one of the most important, sought-after resources and deploy it effectively.

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Pierre DeBois Pierre Debois is Associate Book Editor for Small Business Trends. He is the Founder of Zimana, a consultancy providing strategic analysis to small and medium sized businesses that rely on web analytics data. A Gary, Indiana native, Pierre is currently based in Brooklyn. He blogs about marketing, finance, social media, and analytics at Zimana blog.

3 Reactions
  1. Finally, there is something more recent out there to educate small business owners about their options. This is really good. The problem out there has been the lack of awareness. There are several options available to small business owners apart from the traditional sources everyone keep talking about. I haven’t read this book yet, but as an industry expert, I will put it on list and I’ll be back to provide some unbiased feedback based on my experience.

  2. There were far fewer options for borrowing for small businesses when I started out, than there are now. It is only fair that every small business owner know of the ones available today. I am glad there’s a book out with that information. I love the title too.