There was once a time when cash was flowing and credit was easy to get. An article on raiding captial to start your small business would advise you to take out a home equity line of credit - because it was a given if you owned a home - you had equity there. Home equity was considered another type of savings account and if you're wanting to start your own business - then tap into that savings account.

Ah- then the "reality check" hit. The housing bubble burst and homeowners in once "hot" markets watched their home equity evaporate. Home equity turned into negative equity.

Meanwhile, the other popular stand-by options were also drying up as well. Even credit cards - once a "last resort" measure to access the captial you needed to launch your small business began to reduce credit and close accounts. Advanta- a small business "go to" credit card company closed up shop and shut down thousands of small businesses access to credit.

Now the problem is even worse. When credit card companies close accounts and reduce lines of credit - they reduce your credit score. While you may have had $6,000 of your $10,000 line of credit availlable to you BEFORE Advanta pulled the plug - when they pulled the plug, they reduced your line ot credit to your balance +$500. Suddenly, you went from utilizing 40% of your available credit at Advanta to utilizing almost 100% of it.

As a result, your credit score drops and now it's even MORE difficult to secure other lines of credit.

What's a small business owner to do?

There are two ways to launch a business -with capital or without it.   There are many who would agree that the single best way to launch your small business is to bootstrap it!

Bootstrapping is the term used when you exercise incredible self restraint and make do with the resources you have available.  In other words, when you have more time than money - bootstrapping is the way to go.

Lilian Vernon tells the story of how she began her mail order company and it begins with her sitting at her kitchen table - stamping leather belts and sending hand addressed letters to names and addresses in the phone book.

THAT is bootstrapping. She didn't spend money on a desk - a chair or even a mailing list. It was labor intensive but it enabled her to launch her business without securing a loan or giving away a piece of her business to an investor.

While bootstrapping can be defined as "saving a dime wherever you can" it's actually bigger than that.

At the HEART of bootstrapping is the unwavering FOCUS on building the business and making sales. You're not spending money on extras - there are no "luxuries" because every penny of captial and every ounce of energy is devoted to building your business.

Roger Ehrenberg shares some interesting insight in his post Monitor110: A Post Mortem, Roger openly shares why he believes Monitor 110 didn’t rise to the ranks of legendary success.  Instead of bootstrapping his fledgling company - he writes of how they were flush with Venture Capital funding.

This surplus of cash made them lazy - and complacent.  He shares that they were not revenue focused - because they didn't have to be!!!  They weren't bootstrapping - they were flush with money.

Instead of rushing to market to grab a share - they sat back and waited.  They waited for the perfect market conditions - they waited for their product to be perfect. 

What they found is that the "perfect" time had passed and when they went back to the Venture Capital well - it was dry.

If you're unable to raise capital for your small business - don't let that stop you! 

Your lack of capital may be just what you need to create an unwavering focus on creating revenue and satisfying your customer base.

When you're not flush with funding - you have to be careful.  You can't engage in "spray and pray" marketing. 

You tightly target your audience - and focus on reaching them as effectively and efficiently as possible.

In the end - the current lack of available credit may be the best reason that now is the time to launch that small business you've been dreaming of starting!