The good news is money to finance business growth—or stop the flow of red ink—is still out there. The bad news is that it’s more selective, it may cost more, or it may be riskier, especially in an uncertain economy.

The credit lockup has left small businesses on Florida’s West Coast in a holding pattern; they’re ready to expand and innovate, but unable to subsidize growth plans. Others are struggling with cash flow.

Ray Reher, president of Sarasota-based Innovative CFO Solutions, guides rapid growth companies from venture capital to public offerings, and also serves as an interim CFO for companies whose chief financial officer has left on less-than-friendly terms, or even disappeared. But lately, Reher is navigating more of his clients through the economic downturn.

Before looking for funds from outside, Reher advises small business owners to take stock internally. Analyze slow pays, and make sure the invoicing system is predictable, consistent and conforms with industry standards. If debts to vendors are choking cash flow, ask for 60- or 90-day terms. Some companies have negotiated with vendors to put large payables into short-term, three-year notes with interest, enabling them to "clear the decks and resume doing business," says Reher. Growing firms should consider investing in technology to streamline productivity and stabilize staff. "Technology can be an offensive weapon in this economy," Reher says.

Bank lending is locked up, and even SBA loans are down by about half in this area, says Reher, who notes two bright spots in institutional borrowing. "Owner-occupied financing is still viable from a lending standpoint," he says. Some newer banks, which may have relatively clean balance sheets and capital to lend, are still writing business loans. Bankers who want to help out a valued client are a good source of referrals to start-up banks that might be a good fit.

Those entrepreneurs who need to think outside-the-bank may consider these options:

Angel investors and venture capital. Private money is still out there and looking for a good buy, especially given the poor return on other investments. "It’s selective and looking for good deals. It’s back to basics. People will invest in an industry they are confident in and they know," says Reher.

Loans from key managers. "There are folks whose money isn’t earning much, and they’d like to make some income," says Reher. "They may be interested in lending money with a three-to-five year note with interest or an ownership stake."

Equipment leasing. For any company with limited capital, "It’s a no-brainer," Reher says.

Purchase order financing. A company that has to buy equipment to fill a large order can keep from depleting cash in the lag time between signed contract and final payment by using the purchase order and inventory as collateral.

Factoring. Selling receivables to another firm for collection, also known as factoring, is a third-tier solution in terms of risk, according to Reher, and owners should exhaust other options first. "A company needs to do its homework. They’re giving up that point of contact with customers. The clients I’ve had that have factored have not come out of it, and some are still at it after two or three years."

Merchant advance. Another third-tier option that’s getting more attention is when a lender advances money against anticipated credit card receipts based on recurring volume.

Other asset-based lending. Financing secured with collateral such as equipment, inventory, real estate or other assets. The downside? "It’s expensive," says Reher.