John Hamilton - NH Community Loan FundA business with a strong management team should never have to postpone a solid growth plan because it can’t find the right kind of financing. Yet that can happen.

Successful business owners know their product and services, customers, competition, and industry trends. Business financing is another thing altogether. No doubt, most CEOs are familiar with bank and equity investments, but there are other investment tools that just might be what a business owner needs.

If they knew more about these alternative options, and especially about the factors that make each option more, or less, suitable for their business, they might be able to put the go back into their company’s growth.

That’s why we created Capital Compass®. Capital Compass is a free, confidential, online tool that educates business owners to what type of capital—debt, royalty or equity—is well-suited to their particular business and growth plan. Think of it as a GPS for business financing.

You don’t have to navigate a sales pitch or a half-dozen pop-up ads to use the Capital Compass. The online form, which takes only about 10 minutes to complete, asks 14 multiple-choice questions about a business and its ownership.

As each answer is submitted, its numerical score is reflected in three dials representing the three main types of business financing: debt (traditional bank-type loans), royalty, and equity. The dials offer a visual display of what your responses to that point may indicate about your potential suitability for each of those three types of financing.

Capital Compass also displays each answer’s numerical weight. Answers with a “+” value moves a dial, or dials, toward the green area. This indicates greater suitability for that type of financing. “Minus” answers push them in the opposite direction, toward red (less suitable).

For example, one question asks, “What do you anticipate for revenue growth?” If you select “Some growth (up to 10% annually),” you’ll see “Debt: +2 Royalty: -1 Equity: -3” below your answer, indicating that debt might be the best type of financing for that purpose.

At any time while using the Compass, you can change your answers, click back to previous pages, or even start again, to see how different answers affect your score. If the user returns to the question above, and selects “High growth (31% to 50% annually),” the previous scoring is replaced by “Debt: +3 Royalty: +3 Equity: +3” and the dials change accordingly.

If you’re wondering why a particular answer affected the score the way it did, simply click on the question-mark button to the side of each question. Users who finish the Compass can go to a detailed results page showing all of their answers and their scores.

Capital Compass asks for no identifying information. And while it’s not designed to make financing decisions for you, it can be very handy to discuss the results with your lenders.

If you wish, the Community Loan Fund offers New Hampshire businesses a 30-minute phone consultation. We can discuss your Capital Compass results and what they might say about your capital options.

If your company is ready to grow, give the Capital Compass a try. It might point you to the right capital for your business needs.