Running a business requires funds. You might be able to operate your business based on cash flow. But you also might need to get financing at certain times in your business. In this episode of MissionBusinessPodcast.com, Bernard Roesch shares how to prepare your business for financing so that it is an easier process and you receive financing on good terms.
If you have any questions about this podcast episode, please feel free to contact us.
What If You Don’t Prepare For Financing
Before getting into how to prepare for financing, it’s important for you to understand what could happen if you don’t take the time to prepare.
- The worst case scenario is that you might not be able to get financing at all.
- This could lead to having to lay off employees, to cut costs, or even closing down the business.
- Alternatively, it could just be really difficult to get the funding completed and distract you for your business.
- If you end up in a position where it’s difficult to get financing but you need it, then that could lead to you being forced to accept unfavorable financing terms.
It’s best if you prepare for the financing in advance so that the process is easier.
Preparing For Financing
There are a number of things to do to prepare your business for future financing opportunities.
Keep your credit strong – Your business credit determines your borrowing capabilities.
- Monitor your business and personal credit with credit reporting agencies.
- Also, be sure not to do things that could hurt your credit, such as not paying vendor bills, even if they are very small.
All of these can impact your credit, and it’s important to keep your credit strong.
Build your credit – Part of keeping your credit strong includes pursuing opportunities to grow your credit.
- You can do this by establishing credit terms with your suppliers and showing a payment history with those suppliers.
- You can also lease large equipment called a capital lease rather than buying the equipment outright.
- Also, pay suppliers on time or early to show your creditworthiness.
- All of these factors establish and grow your credit strength, which is important for when borrowers consider lending you money.
Keep bookkeeping up to date – In addition to building your credit, it’s important that you keep your business books up to date. Lenders are going to want to review financials year to date. And if you don’t have that information, it can make it difficult to start the financing process.
Do You Need Help Preparing Your Business
If you need help preparing your business for financing or other financial support in your business, contact Bernard today.
You can also visit MissionBusinessPodcast.com for more insights that Bernard has been sharing with us in the previous episodes.
[Image: https://www.flickr.com/photos/jamingray/979975865/ ]