Coming Up Short Short-term financing could help your company overcome temporary setbacks or cash-flow issues.

For Idaho entrepreneur Leo A. Geis, running his commercialaerial photography business is somewhat akin to working without anet. Inconsistent customer demand, changing technology, and theneed to rapidly expand into new geographic markets all make for anunpredictable commercial existence. "There is no cookbook fora company like this, so we're guessing a lot," says Geis,46, whose Idaho Airships Inc. also specializes in forensicimaging for use in litigation. "Because of that, we [need]buffers financially that you don't [need] in established ormore predictable markets."

One of those safeguards has been short-term financing. Not longafter launching the Boise company in 1997, Geis had to upgrade hisphotography equipment to get better aerial images. To fund theunanticipated purchase, the half-million-dollar company borrowed$80,000, most of which was financed for just one year. The interestrate was about 4 percent higher than for a longer-term arrangement,but the flexibility was well worth the cost, in Geis' view."We don't know what we're making next week or fourweeks from now," he says. "It allows us to make a minimumpayment if necessary or to load the payment withoutpenalty."

Though the company could have used its own capital to fund thetransaction, Geis thought there were more productive ways to usethe cash. "We used financing instead of cash to remainprepared for a variety of competitive potentials, such as mediacampaigns," he says. The ease with which he could obtainshort-term funds also allowed the company to capitalize quickly ongeographic expansion opportunities, which are imperative in hisindustry. "We might have to make major decisions, like openingup a new market, in four days," says Geis, who now operatesnationally. "There is no way to go out and acquire equitycapital or long-term high-dollar financing."