Cash is the lifeblood of a business
As any good business owner knows, cash is the lifeblood of a business. Without it, companies wither and die, or worse, remain stagnant and do not reach their financial potential.
There are various scenarios in which financing is not only appropriate, but also, at times, absolutely necessary to help keep your company healthy.
You may have already encountered some of the frustrations associated with securing financing. You could have needed an infusion of cash but had limited time, resources and knowledge of the lending marketplace. You may have tried to get through the process on your own, visiting your personal bank, the bank down the street from your office and a third institution referred to you by an associate or friend.
You copied the mountains of paperwork required for the loan application, forwarded that bundle of documents to the lending officer and left your company's financial future to chance. Then you waited for the lender to evaluate your documentation, request more that you did not know was needed, tell you his or her version of your future cash flow potential, determine how much you should borrow and dictate the terms of the loan agreement to you.
Banks are in business to make a profit. They sell cash as a product to the highest bidder and may also specialize in certain industries or types of loans, preferring to stick to their core competencies when making loan transactions.
There are many reasons loan applications are declined or reduced, including inconsistent historical financial information, lack of prospective financial data and incomplete or ill-prepared proposals. Knowing what a bank is looking for to support a loan request is very important, and there are better ways to ensure you obtain the financing you need -- with favorable terms.
If you are thinking about financing your business, consider using your trusted adviser as a consultant who can lead you through the red tape and enable you to focus on ownership issues rather than stretching yourself thin by picking up the additional role of CFO. more...
By Stephen H. Barnett
There are various scenarios in which financing is not only appropriate, but also, at times, absolutely necessary to help keep your company healthy.
You may have already encountered some of the frustrations associated with securing financing. You could have needed an infusion of cash but had limited time, resources and knowledge of the lending marketplace. You may have tried to get through the process on your own, visiting your personal bank, the bank down the street from your office and a third institution referred to you by an associate or friend.
You copied the mountains of paperwork required for the loan application, forwarded that bundle of documents to the lending officer and left your company's financial future to chance. Then you waited for the lender to evaluate your documentation, request more that you did not know was needed, tell you his or her version of your future cash flow potential, determine how much you should borrow and dictate the terms of the loan agreement to you.
Banks are in business to make a profit. They sell cash as a product to the highest bidder and may also specialize in certain industries or types of loans, preferring to stick to their core competencies when making loan transactions.
There are many reasons loan applications are declined or reduced, including inconsistent historical financial information, lack of prospective financial data and incomplete or ill-prepared proposals. Knowing what a bank is looking for to support a loan request is very important, and there are better ways to ensure you obtain the financing you need -- with favorable terms.
If you are thinking about financing your business, consider using your trusted adviser as a consultant who can lead you through the red tape and enable you to focus on ownership issues rather than stretching yourself thin by picking up the additional role of CFO. more...
By Stephen H. Barnett
posted by Eric at
7:40 AM
