Posts Tagged ‘business financing consultant’
Business Financing Specialist
October 19th, 2011
“What Exactly Is A
Business Financing Specialist?”
While there can be several different definitions to what constitutes someone calling themselves a business financing specialist, I’m going to give you my own spin based on my own opinion of the role.
To start with, a business financing specialist must be someone that is well versed in both finance and accounting with some direct experience working in a business.
The reason for these specific requirements is that the key to being able to assist a business owner or manager with their business financing needs is to first be able to understand exactly what is going on in the business and what their financing and credit profiles look like.
By having a solid background in business and finance, a business financing specialist can then determine what types of financing strategies will work and what types won’t work.
The second key requirement that a business financing specialist needs to possess is access to sources of debt and/or equity financing that providing business financing to the market that the business finance specialist serves. In addition to having direct access, the specialist must also be able to understand the lending/funding requirements of each and every source of business financing they work with and he or she must also stay up with their funding interests and criteria on an ongoing basis.
A business financing specialist is middle man (or woman), trying to connect borrower to lender, owner to investor, and so on. Without both sides of the equation, no amount of brilliant understanding of customer needs is going to do any good. The exercise here is to locate and secure capital that meets the requirements of the client.
If the business financing specialist or financing consultant cannot meet the client’s expectations, then he or she needs to work with the client to better define a financiable scenario or decline the engagement. Pushing a rope up hill is not an options. Either you have a workable engagement or you don’t.
The next characteristic of a business financing consultant is the ability to properly assemble information into a format and presentation that proactively addresses the targeted lender or investors key questions, concerns, and criteria. This is partially art and science which is developed over years of practice. The ability to tell the story properly separates the good consultants from the not so good.
The final main characteristic I will speak about is the ability to get a deal approved AND funded.
There is no consolation prize for getting close. Many times a financing deal will be 95% complete and fall apart at the last minute or level of sign off or both material and obscure reasons.
The ability to stay ahead of everyone else in the funding process, communicate on relevant and clear information on a timely basis, and problem solve issues as they arise are all keys to having business financing success.
The business financing or commercial financing process is not easy, and has even gotten harder since the start of 2008 when we have been pushed into a financial market place not seen since the second world war.
As a result, the need for business financing specialist is more prevalent now then ever.
It costs money to utilize this type of expertise, but that is no different than with other professionals including accountants, lawyers, insurance brokers, and so on.
The questions business owners and managers have to ask themselves are 1) do I know enough about the business financing process to do it myself; and 2) do I have the time to invest in the process or is my time better spent on core business activities?
Click Here To Speak With Business Financing Specialist Brent Finlay
Business FinancingDebt Financing Sources Are Like Shifting Sands
March 10th, 2010
We are conditioned to believe through our consumer credit experiences that there is a never ending source of money out there waiting for us to utilize.
And while there certainly is an almost infinite supply of money available, the actual sources that businesses rely on to supply it are collectively more like shifting sand than mass volume commodity suppliers.
There are a number of reason for this.
First, unlike consumer financing which is much more uniform, business financing is highly customized with every financing opportunity being somewhat different from the rest. A consumer has a job, a credit score, and a some amount of personal net worth. A business functions in an industry, providing a certain services and/or goods, has customers, suppliers, infrastructure, employees, pension plans, government remittances, and so on and so on.
Because human beings have to interpret all this data, there can be vast inconsistencies in lending decisions not only between lenders, but between underwriters that work for the same lender.
Second, debt lenders all have a financing portfolio of loans to manage. Each portfolio will be assessed for 1) overall portfolio risk and 2) industry and/or asset concentration. To maintain a balanced portfolio, lenders will change their application of their own lending criteria to strengthen the portfolio where ever possible. For instance, if their loan portfolio is too highly weighted towards the automotive industry, they could stop lending to this sector all together for a period of time regardless of how strong the overall application is.
And when this happens, its not like they put a sign up stating this change to their lending practices. Instead, the business applicant will get declined and typically will not know exactly why. This can be quite frustrating in that a similar application for financing made several months earlier could have been approved, once again attesting to the shifting sands.
Third, lenders also source the capital they provide other sources. Sometimes their own sources of supply dry up or cut them back, leaving less available funds for new loans.
Fourth, when economic down turns occur, lenders often will sit on the proverbial fence to see if their portfolio will become impacted by borrower defaults. While their portfolio may be very strong, the unknowns associated with how economic forces will impact their borrowers over the near term, cause them to slow down or stop lending money.
Locating and securing business financing is all about where you are located, what you plan to do with the money, at a given point in time.
Even if the “where you’re located” and the “what you plan to do with the money” parts stay the same, your results can still vary widely at different points in time for some combination of the reasons mentioned above.
This is probably the area where a business financing consultant provides the most value. As an individual that is working daily on business finance scenarios, financing consultants are able to see how the sands are shifting and build that intel into their process for finding the most relevant form of capital available to their client at the point in time its required.
If you have a business financing need you wish to discuss, please give me a call and I will give you a free assessment of what I believe to be the most relevant options available to you.
Click Here To Speak With Business Financing Specialist Brent Finlay
Business Financing