More on Creative Financing for Green Businesses
I noticed that an old post (from January) has been getting a lot of views, so I thought I should revisit the topic of self-funding your green start up.
One way to fund your business without raising money is to find alternate (possibly just, interim) revenue streams other than your primary desired business model. For example, if you want to be a green retailer, you might start out as a match-maker/dealer, connecting buyers and sellers for a fee or markup without actually holding expensive inventory. As you build your “dealer” revenues, you can start to acquire inventory. This is the business model I described before.
However, I know that one of the most common ways that entrepreneurs fund their businesses without venture capital or other outside investment is with personal credit cards. Co-op America recently published an article called “Responsible Credit Cards,” which I see as a good resource for eco-entrepreneurs.
For those of you planning to fund your green business with credit cards, this article gives both a good way to compare credit cards as well as some specific information and contact information.
One of the most obvious ways a green entrepreneur would want to compare credit cards (really, issuing banks) is on the banks’ policies on environmental issues. Co-Op America names names when it comes to major banks that finance coal-fired power plants, mountaintop-removal coal mining, clear-cutting operations, etc. Other social factors (beyond the environment) might matter to you too, so the article also cites Consumer Reports‘ ratings on predatory lending practices, interest rates and problem resolutions.
If you are a really cash-strapped eco-entrepreneur, one data point in the article will probably pop right out at you: Working Assets offers a Visa card with 0% APR for the first year. Since the Working Assets Visa is issued by Bank of America, it doesn’t get highest ratings on environmental issues, but Working Assets definitely supports environmental and progressive causes with a portion of the fees it receives.
If you have some creative ideas for financing a green startup business, please let us know. In the meantime, here are some… Related Posts: