The 80/20 Of Business Finance
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    Business Finance Ready

    “Here Are Some Tips For Being Ready For
    Business Financing Applications”

    One thing that many entrepreneurs are not not keen on is paper work and bean counter type activities that may drive them to the Aspirin or Tylenol bottle for headache pain relief.

    But regardless of what a business owner or manager likes or believes is a good enough representation of their business, debt financing sources and equity investors have other ideas.

    To this point, whether you are looking for business financing today or not, there is a certain degree of readiness that should always be in place so that there are no delays in applying for financing and there is no lost opportunities from a lack of basic information being available or presented to a source of capital.

    For instance, one of the most basic requirements any lender or investor will ask for is the last two or three years of third party accountant prepared financial statements for the business.

    If this is not always available and up to date, it should be as it will be very difficult to be considered for financing without historical financials.

    And if the amount being requested is over a couple of hundred thousand dollars, then the type of accountant opinion is also going to be important.

    For small financing amounts, a notice to reader accountant statement can be sufficient to most lenders, but as the amount of financing requested and overall financing outstanding and the overall level of business complexity growths, the more importance will be placed on the accountants opinion through either a review engagement or audit.

    These additional levels of verification cost more money, but these can also be the difference between getting serious consideration from the type of lender or investor you want to work with and missing out on a good business financing opportunity.

    The same can be said for management accounting reports that show product margins, variance reports, and operating break even. Projections and forecasts of both cash flow and income are also going to be important to complete the picture of where the business is headed.

    Having good records of company assets and reports of good standing with with respect to any government tax accounts and regulations can also be helpful.

    These are some of the basics that relate to virtually every business and the more these items are kept up to date, the faster the business will be able to react to capital requirements.

    Scrambling to get many of these items up to date can not only cause delays, but lead to mistakes and a poor representation of the business and your business management.

    Having the basic core financial information for past, present, and future at the ready provides confidence to lenders and investors, which can immediately separate you from other applicants they are considering.

    Click Here To Speak Directly To Business Financing Specialist Brent Finlay For All Your Business Financing Needs

    How Superbowl Preparation Relates To Business Financing

    “Success Does Start With Preparation, Regardless Of What The Objective Your Trying To Achieve”

    The Superbowl didn’t go so well yesterday for my Steelers… that is for the part of the game I actually got to see versus chasing my kids around.

    Regardless of who won, what was well known before the game began was that both teams were prepared to play, that sufficient preparation had gone into the two weeks leading up to the big game and for both the Packers and Steelers, success was only going to be possible through the necessary preparation, or at least it would considerably strengthen the odds of winning the game.

    With business financing, there is a view among many business owners that securing third party capital in the form of debt financing or equity investing does not require a great deal of preparation and that knowing the process and managing the details of what leads you to getting business financing in the first place are not overly important.

    The football equivalent to this type of thinking would be for the Steeler and the Packers to take two weeks off prior to the game, arrive a couple hours before the game began, and then get ready to play. This is not to say that this approach could not be successful, but their are long odds against it which is why no one does it.

    Yet in the business world, the process of looking and securing capital for a business is very much like this at times. The business owner, once again in many but not all cases, doesn’t really understand the full process, starts preparing too close to the time the money is required, and assumes that he or she will be able to convince a lender or investor to provide capital without much effort or time being extended.

    Once again, this approach can prove to be successful, as it has in the past, especially in the economic period prior to the last recession.

    Which is what has also led us into the current economic downturn…too many people prepared to borrow or invest too much money into situations that were not prepared to receive and properly manage capital.

    Now that things have tightened up in the capital markets, success once again goes to prepared more so than the unprepared.

    While developing business plans, financial projections, and project plans for the future as well as developing a solid working understanding of the performance metrics of the past are not going to be viewed to be overly sexy by most business owners, managers, and entrepreneurs, the same can likely be said towards doing extra film study, extended practice time, and team meetings.

    One of the things that has kept me a Steeler fan for over 30 years is their steadfast approach to running a business in a consistent fashion. Focusing on a proven model only makes the future results better. Flip flopping from approach to approach surely will not, especially over time.

    Most business owners have a goal to be in business for a long period of time, and modeling out success for many will include the periodic or ongoing need for third party financing. To maintain stability with this critical business component requires a great deal of diligence and at times preparation.

    Preparation never guarantees the outcome, but almost without fail will increase the probability of success and make the outcome more realistic to achieve.

    Click Here To Speak With Business Financing Specialist Brent Finlay