If you’re looking to borrow money for your business these days, go in armed with sterling credit, a top-notch business plan and several years of successful operations. Nearly 70% of U.S. banks reported that in late 2008 they had tightened lending standards on commercial and industrial loans to small firms, according to the Federal Reserve.

Money hasn’t dried up for everyone, however. “I don’t see the issue as one of credit availability for good customers,” says Doug Freeman, executive vice president at BankAtlantic in Fort Lauderdale, adding, “Competition between me and my fellow bankers is very intense.”

Indeed, Tad Ihns, founder of Pensacola-based Avalex, a maker of flat panel displays, mapping systems and other products for military and law enforcement aviation systems, purchased a “couple hundred thousand dollars” worth of new equipment in December 2008. Working with Wachovia, Ihns says, “We were able to easily get a loan for that.”

To spur lending, the federal government’s Troubled Asset Relief Program (TARP) has injected billions of dollars into banks since October 2008. More important to small businesses, the Federal Reserve’s $1 trillion Term Asset-Backed Securities Loan Facility (TALF) is designed to improve the secondary market for small business loans, a move that will make it easier for lenders to sell their loans and use the proceeds to make more loans.

Closer to home, Gov. Charlie Crist has asked the Florida Legislature to provide $10 million for a pilot loan program. It would give businesses with 10 to 99 employees a 2% loan of up to $250,000 for five years. Another program already enacted, the Florida Opportunity Fund, will provide state funding to venture capital companies that agree to match the money and invest in Florida-based startups.

[Photo: Eileen Escarda]

Kidokinetics - Weston
Founder and President: Terri Braun
Founded: 2000
Business: Children’s athletic and fitness programs
How it is Financing Growth: Franchising
Employees: 6

McDonald’s, Ace Hardware, Merry Maids and dozens of other well-known companies have used franchising to grow into nationwide powerhouses. But smaller companies such as Weston-based Kidokinetics also are using franchising to generate revenue and expand their reach.

Kidokinetics founder Terri Braun grew up in South Africa and competed in karate internationally before moving to Florida and setting up her company in 2000. Her idea is to introduce kids to sports in a noncompetitive way. “Not every child needs to be the best,” says Braun.

Working through schools and parks, Braun and her coaches run 45-minute classes that teach kids ages three to 12 a bit about a variety of different types of fitness. The classes can include basketball, hockey, relay races, tennis, stretching, volleyball, obstacle courses and more.

After six years of running Kidokinetics, Braun wanted to expand beyond south Florida, where the company conducts programs at 80 locations. She began looking at franchising. “I just felt that by the requests I was getting, there were so many people out there” who were interested in the program, she says.

Working with a consultant, it took Braun about a year to prepare the legal, financial and organizational documents for the franchise offering. Braun charges a $30,000 franchise fee and receives monthly royalties of 6% on the franchisee’s revenues. She sold her first franchise in February 2008 to a Dallas entrepreneur and the second in September 2008 to the same person for a nearby territory.

Although the credit crunch has impacted franchise sales, Braun says she’s getting more inquiries from people who have been downsized and are interested in going out on their own.

[Photo: Jeffrey Camp]

The Chestnut Law Firm - Gainesville
Founder and President: Christopher M. Chestnut
Founded: 2006
Business: Law firm specializing in personal injury and class action cases
How it is Financing Growth: Loan
Employees: 14

With encouragement from famed Florida attorney Willie Gary, Gainesville attorney Christopher Chestnut set up his own firm at age 26. From the start, one of his biggest challenges was access to capital. “I was a tremendous risk at 26,” says Chestnut, adding, “My credit wasn’t bad, but it was limited.”

Still, Chestnut, who clerked with Gary’s firm as well as John Morgan’s Morgan & Morgan while he attended law school at the University of Florida, built the firm using bank lines of credit. He added three additional attorneys and 10 staff assistants.

In 2008, looking for working capital to fund further expansion, Chestnut ran into a roadblock at banks. “I found a significant barrier,” he says. He turned to the Access Florida Finance Corporation, which is the new name for the Black Business Investment Corporation. Access Florida uses state funding and income from lending fees to provide both loan guarantees and a limited amount of direct loans to black-owned businesses, particularly in smaller communities around Florida.

Chestnut applied for about $50,000 in October 2008 and received the loan later that fall. “It’s just like going to the bank,” says Access Florida President Mark Scovera, who adds that a lot of banks don’t want to deal with small loans of $50,000 or less, so that is Access Florida’s focus. Chestnut plans to use the funding for equipment and additional staff.

[Photo: Gregg Matthews]

PlusOne Solutions - Oviedo
CEO and President: Craig Reilly
Founded: 2005
Business: Management of independent service contractors for brand-name retailers
How it is Financing Growth: Investment Capital
Employees: 29

Venture capital investments in Florida dropped dramatically in 2008, but PlusOne Solutions was one of the few companies to get investor capital. The Oviedo company helps major retailers and manufacturers recruit, check backgrounds, dispatch and manage outside independent service personnel who deliver and repair electronics, appliances and other products.

PlusOne got investors’ attention by putting together a strong management team and proving themselves and their concept before they asked for money. Founding CEO and President Craig Reilly and two partners used their own money for startup capital for more than two years before seeking money to grow from outside the company. With the help of the University of Central Florida’s Venture Lab, Reilly drafted a business plan designed to appeal to investors and he refined a funding sales pitch, known in the venture capital world as an “elevator speech.” “We were looking for a group that offered more than just the funding,” says Reilly, explaining that he wanted a long-term partner. PlusOne projects $3.5 million in revenues for 2009.

In October 2008, just when the global financial meltdown took hold, PlusOne closed a deal for $752,000 with the Winter Park Angels investment group. Says Reilly, “Given the current economy, this money will go for at least two years.”