After three Wachovia Securities executives were offered a chance to move to St. Louis or lose their jobs, they spent a lot of time at the library.

Every Tuesday night the trio met, hopping from one branch to another.

Borne out of those gatherings was Oyster Consulting LLC, a firm that works with brokerage houses and investment advisers to help them with compliance and technology needs.

A month into business, they have a handful of clients and proposals out to attract more.

"It's exciting and scary at the same time," said Patrick M. Dennis, one of Oyster's three co-owners whose last day at Wachovia Securities was July 31.

As layoffs continue nationally and in the Richmond area, one bright spot is that those displaced workers may buy a franchise or go into business for themselves. Yet starting a business hinges on getting the necessary finances.

The number of people working with the Greater Richmond Chamber to start businesses has increased 10 percent during the past few months. About 40 new business starts are happening each month, said Mike Leonard, director of the chamber's small business development center.

"Unemployment increases rates of self-employment," said Jeffrey Pollack, an adjunct professor at University of Richmond's Robins School of Business.

The risk from starting a company after losing a job is less than leaving a job to start a company, he said.

"I think there is a realization that when you work for a large employer that any day can be your last," said David Gallagher, chief executive of Dominion Payroll Services in Richmond. "With them, small business provides a bit of reprieve from that."

Gallagher started his payroll company after getting laid off from ADP Payroll Services nearly eight years ago. His severance package helped with startup costs.

"Corporate America is a great investor in small businesses that way," he said.

B. Robert Hall used severance money from Wachovia Securities to help start Oyster. "Rather than trying to find something else and socking [the money] away, I'd rather put this [severance] into a business that I'm a controlling owner of," he said.

A merger between Wachovia Securities and A.G. Edwards was announced in May 2007. Offers to move or be laid off happened between October 2007 and January, with the layoffs staggered. Hall's last day was Oct. 31.

The time gave him a chance to ponder his future.

He started contemplating buy- ing a franchise, and then another Wachovia co-worker approached him about starting a company. He ended up working both possibilities, buying an Aussie Pet Mobile franchise and becoming a partner in Oyster.

"I wanted to make sure I kind of hedged my bets," he said.

A former colleague manages the pet grooming business while Hall focuses on Oyster. He used credit to finance the franchise purchase.

Starting a business hinges on finances.

Eighty-one percent of startups nationwide are funded with personal finances, said David Fuller, business services manager for Virginia Department of Business Assistance.

"People don't usually go to banks or credit sources first," Pollack said.

If you don't have enough cash, getting a loan is not easy because of the credit crunch.

In October, the Small Business Administration guaranteed 45 loans in Virginia, which is down 40 percent compared with the same period last year, said Andy Keller, a lender relations specialist at the Virginia office.

"I'm getting lots of calls from people who want to start a business," Keller said. "The problem is finding lenders that are willing to take the risk."

But that crunch could ease soon.

A new plan announced last week by the Treasury Department will give loans to investors willing to buy certain securities made up of SBA guaranteed loans and other loans. An SBA official called it a step in reviving the loan market.

The treasury move also could help unclog credit markets and free up money.

While funding could be hard to get, the downturn does have some advantages.

"It's a great time to be starting a business because the space is generally cheaper," said Wilburn L. "Buddy" Doyle, another Oyster owner, whose last day at Wachovia was Sept. 30.

Oyster's rent is lower than what it would have been years ago, and computer equipment is cheaper. Company furniture is used, recovered from firms replacing equipment or downsizing. Some is even from Wachovia, purchased via auction.

"You become very resourceful when you get out on your own," Doyle said.

Contact Emily C. Dooley at (804) 649-6016 or edooley@timesdispatch.com.

(MG-Personal Finance)