Figuring Out Funding When Your Business Is Growing
Most business articles focus on financing and survival issues when trying to get a business up and off the tarmac when you first start out. Less is said about the financing issues you can run into once you are up and running. That ends now.
Being a small, growing company with little history places you in an odd area when it comes to commercial financing. You aren’t exactly new, but also aren’t established. This makes you a bit of a ghost as far as lenders are concerned. This is often bad news since you usually need financing to grow a business since you need to buy things like equipment, hire more employees and so on. When seeking such financing, there are many things to consider. Here are five important ones.
Business Plan
Look at it this way. You want a financial institution to grant your business a loan. They have no idea about your business and thus the onus is on you to provide them with as much information possible. It will need to describe your business, detail the start up, where you are now headed and why money is needed to make it happen. Put in facts, facts and more facts!
Credit Report
You might be surprised to learn you have business credit. Well, you do and you need to check it frequently. The lender is going to go over it with a fine tooth comb, particularly given the current lending environment. Make sure yours is buffed to a shine so it doesn’t cause you problems.
Investment Options
The bank down the street may be a financing option. Then again, it might not. You need to think big when it comes to financing. Spend a good bit of time researching the options available in your area. You might be surprised to learn that agencies that regulate your industry, such as the USDA, also offer loan programs. Your starting point should always be the Small Business Administration, an agency that is actually tasked with the mission of helping companies like yours. Imagine that!
Valuable Rejections
Rejection is a part of life as we all know. If your financing package has been rejected, don’t just head to the bar. Ask questions of the lender. Don’t be a jerk. Just try to find out why you have been rejected so that you can isolate the weak points of your presentation or business profile. Then fix them and apply with another funding source. In short, learn from your mistakes.
Commercial financing is a world unto itself. Treat it as such and you’ll find that getting financing is not only possible, but probable.
