Our business model is based on IAAS. We have to keep investing in equipment that we rent out and always lack funding to purchase new equipment. We have come this far with private loans and fundings from friends and family which are for very short terms and majority of revenues and earnings go to repayment(since this are interest free and no additional monetary benefit is given so payments are extremely high). Where should I look and what terms should I expect ?
Started = 2008
Invest = $12000
Revenue = $40000
Investment = $15000
Revenue = 72000
Year = 2011
New Investment = $175000
Revenue = 118000
Seeking Investment = $800,000
Expected Revenue = $400,000 Annually
Either cut your costs or increase your revenues. You don't specify what type of equipment you are buying, but can you buy off-lease or refurbished at lower prices to cut your costs?
And you should look at your customers and their needs to see if you can offer them services or other solutions. Then you can increase your revenue without increasing your capital costs
You can't continue to make expenditures of 1.5 to 2x your revenue every year. At some point you have to come back to the situation you were in in the first few years - higher revenues than expenses.
Why grow if you are just going to lose money at it?
Are expenses going to start shrinking or ar you going to grow revenue more?
Your revenues don't look too bad depending on how many people you have working.
Why are your costs so high? Find ways to go lean if you can. Cut costs, and make yourself more attractive as an investment.
Have you considered giving out equity instead of taking loans? You are essentially gutting your business to repay those loans, when you could be putting that money back into the company. Anyone looking at the numbers can see that you're growing, if you didn't have to pay back such crippling debt every year, you would likely be growing much faster.
If you're not a fan of giving out some equity in the company, think of it this way, do you want to own the whole grade, or a slice of the water-Mellon?
Are all your expenses related to equipment rental?
Seeking traditional financing (IE, bank loan) wouldn't be a bad idea at this point either. It looks like you have pretty steady cashflows, but again, you have to worry about repayment, even though your yearly loan payments will be much less. In most cases, I'd prefer equity over bank loans.