It is said that small businesses are the backbone of the American economy. Yet, for the sector that supposedly helps carry the country, it seems as if small businesses always have it rough — from securing financing as a startup to sustaining their commerce.
Securing a loan from banks has always been a struggle for small and/or starting businesses. Add the fact that running a trade means incurring costs left and right. All these make it easy to get disheartened about ever starting a business. Thankfully, private equity firms exist, and the right one can help fill in that financial gap and give you a better chance at succeeding in your venture.
Importance of private equity and financing firms
While they aren’t always the go-to source of funding for some startups and small businesses, private equity firms are increasing in importance and demand — most especially for entrepreneurs looking to scale beyond the launch phase and find “bigger fish to fry.” Usually, banks provide financing in the form of business loans. However, when business owners need cash for new equipment, more inventory, and other resources to meet the demand, equity firms simply have deeper pockets.
One of the leading equity firms in the space is Baird Inc., which has secured its spot as one of the top financing companies in the U.S. Specializing in providing financial solutions to small and mid-market businesses, here are five things you need to know about this steadily growing firm:
1. It’s for the upstarts and big dreamers
When it comes to finding businesses to pour its pools of capital in, Baird Inc. focuses on small to mid-market businesses that show potential for growth. While some equity firms only approve capital investments for businesses in certain industries, Baird Inc. stands out from the crowd by being undiscriminating in this regard. Instead, it chooses to base its decision on a business or borrower’s strategic plan. As long as a business is growth-oriented and has a feasible expectation of advancement, Baird Inc. is willing to help.
Through this, more businesses have a chance of getting the capital they need to start, grow and sustain their ventures, regardless of what industry they’re trying to break into.
2. Loan plans benefit the borrowers
In the case of its loans, Baird Inc. usually structures its capital investments as a two to three-year senior-secured plan, with borrowers paying monthly interest, alongside equity warrants and other upside opportunities. This is typically done via re-financing, a traditional lender or through the actual company profits, whichever is agreed upon.
Either way, the strategy is advantageous to Baird Inc.’s borrowers, as it guarantees the retention of majority equity. This helps increase success while also minimizing the risk of borrowers getting stuck in their payments.
Banks that used to provide loans and capital are now becoming increasingly conservative and restrictive in lending, especially to businesses that are still under the sub-25 million revenue.
Baird Inc. steps in to bridge this gap for the small businesses, acting as a niche player for potential borrowers that are looking for capital and simply have nowhere else to turn to. This allows small business owners not only to get a starting loan but also receive support for costs that come from upgrading and the ever-changing market. It doesn’t end — access to new and potential markets as well as improving the overall process of the company are services that Baird Inc. offers.
Additionally, it helps provide operating partners with expertise in the company’s industry to assist or even help oversee the company operations. This way, not only will the borrower benefit from the partner’s expertise but also increase its chances of being a profitable enterprise thanks to added input.
As mentioned above, Baird Inc. is an equity firm that thrives in diversity. Not only in the companies that it lends to but also in its partners and the companies that are already under it.
Baird Inc. understands that when it comes to making capital investments, the diversification of industries greatly increases your chances of growth and sustainability business-wise, which is why it boasts a multi-faceted portfolio that helps minimize risk. This ensures that Baird Inc. is stable, which in turn guarantees continued support to the companies that take loans from it, resulting in a win-win situation for all parties.
5. Success is its foundation
Baird Inc. was created by an entrepreneur that has success in his DNA.
CEO Eric Baird first founded MyUS.com, a Sarasota-based mail forwarding operation that soon transitioned into shipping American products to overseas customers. What started as an idea at the dinner table with his mother, Baird would then spend the next 15 years growing an initial loan of $30,000 into a 700 square-foot office, a global operation, and more than 400,000 customers from all over the world. This would earn Baird Review’s Entrepreneur of the Year 2009 award.
Baird sold MyUS.com in 2012 when the company was already worth $200 million.
Not long after, Baird channeled his passion for both business and entrepreneurship into establishing Baird Inc., an investment and equity firm that focuses on giving back to upstarts.
Today, Baird Inc. is a top competitor in the field of investments and private equities, continuing to serve America’s small to the medium-sized business industry.