Working Capital Business Financing Sources

Working Capital business financing is never a question of why – it’s just simply a matter of when! Working capital and cash flow are of course the heart of every business. The challenges of obtaining that financing become a question of time.Perhaps you need cash for for your regular ongoing business cycle – that’s the simple one – you buy inventory, your produce things, you sell, bill and collect. In a perfect world your suppliers give you unlimited time to pay, and unlimited credit limits. And of course your customers pay you in exactly 30 days. Guess what? It’s not a perfect world!If you are a traditionally financed firm you have access to bank capital for revolving credit lines based on your business needs. But for a growing number of Canadian firms that access to traditional bank capital is not available. Those scenarios require a special expertise in identifying sources of business financing that work for you. The solutions actually are quite numerous – its becomes a questions of which solution works for your firm, what are the costs involved, and does the solution fit within your business model.

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The business financing we are talking about can take many different forms – it might include an asset based line of credit, inventory financing or purchase order financing, a sale leaseback on unencumbered assets,, working capital term loans, or accounts receivable financing, otherwise known as factoring.One of the most important things you can do for business financing is to ensure that the type of financing you source matches your needs. What we mean by that is that you should match short term needs with short term financing. Factoring might be a good example. If your receivables aren’t financed, and you need cash to meet inventory and supplier commitments that type of financing is immediate and addresses your needs. Why would you enter into a five year term loan at fixed payments for a short term capital need or requirement?The best way to think of short term financing is to focus on the current assets part of your balance sheet – those items include inventory and accounts receivable typically. Those assets can quickly be monetized into a working capital facility that comes in a variety methods. The reality is that your inventory and accounts receivable grow lock step to your sales and your ability to finance them on an ongoing basis will give you access to, in essence, unlimited working capital.There are some solid technical rules of them around how you can generate positive pricing for operating facilities. By calculating and analyzing some basic financial ratios (we call them relationships) in your financial statements you can get a strong sense of whats available in working capital business financing and what pricing might be involved. Those ratios are your current ratio, your inventory turns, your receivables turns or days sales outstanding, a, and your overall debt to worth ratio. Depending on where those final ratio calculations come in will ultimately allow your working capital financier to put your firm in a low risk, medium risk, or high risk band of pricing?

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In Canada working capital rates range from 8-9% per annum to 1-2% per month, depending on what assets are financed and how they are financed.So whats our bottom line in working capital business financing? It is simply there are alternatives available and you as a business owner of financial manager can assess those alternatives in terms of short term needs or long term needs. Pricing and solutions vary, and your ability to convey the positive aspects of your business to the working capital lender will ultimately lead to a final pricing and solution. Speak to a credible, experienced and trusted working capital business financing advisor to determine what solutions are the best for your firm.

Getting A Business Financing Loan

Business financing loans are a line of credit which help people who are in business. There are different kinds of business financing loans that are offered to different lenders either to raise funds or loan capital to your business in order to expand your company.Although there are many ways also to finance your business and one should have sufficient cash flow within the existing business you have so that the lender will be able to finance the growth of your company by its own means or you can turn to a bank or other financial institutions that can provide different variety of loans.Having a business financing loan is not as easy since they have some criteria or financing programs where in you meet the following criteria such as:Your business must have commercial customers
Your business must be established and must have consumers or customers.
They don’t finance on real estate projects

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Some of the business financing programs:Business are available of every size
Easy to obtain
Have many advantages over conventional business loans
Can be set up in a few daysThere are some business financial loans that don’t require you to have a good personal credit or showing countless financial statements since their financing program or loan allows being flexible to help your business grow but before looking for a business financing loan, you need to know how business loans work and used.You can see that there are many sources of financing loans that are geared to types of businesses but the sources have certain criteria for investment and loan but that depend to the area which they participate.These are some of the areas of Business Financing Loan:Commercial Property
Start-up Financing for business
Loans for Government
Purchase Order Advances
Leasing Equipment
Commercial Financing
Invoice Factoring
Asset Sales Leaseback
Investment Banking
Angel Investor s which is known as informal investor
Venture Capital known as Private Equity CapitalBut private money business financing loan is different since it includes equity loan, hard money as well as private money loans. They limit only to small business investment companies, private investors, business angels, ventures capital firms and commercial lenders.The loans have two types for you to choose when in regards of terms in payment. There is the short term and as well as long term which suits your budget and you will notice also that there are lots of commercial lenders, business loan brokers and business financing companies had gone out of business due to global crisis and many people were having loans anywhere and everywhere in order to survive.

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If you need financing for your business, you need to plan and study hard of it since financial institutions requires business plan that includes detailed start up cost, marketing plans, monthly expenses, projected profit, etc. Remember that having a business one should do hard work, passion, and determination and have dedicated workers who desired to have the business of their boss grow with success.So If you think that your business is doing good and need some additional capital for expansion, then you need to plan for that and think it over to have a successful business.

Small Business Financing – What Are Your Options?

In the meantime, one has a wide variety of options for small business financing. Fortunately, you have other resources to rely on, unlike just bank loans as it was in the past.What are the options that are commonly overlooked?Currently, many unconventional sources of finance are coming up as well, e.g. contract financing, which is one of the widest preferred options. Indeed, it is also known as purchase order financing. Following this option, a lender finances the purchase order rather than the manufacturer. Consequently, the lender gets the agreed portion of profit when the process is finished. This is known as purchase order financing.What is the next option?One more type of finance options is to think of grants for small businesses. But, one negative aspect of this option is the fact that grants are not considered that reliable. However, venture capital is one of the small business financing options that is best defined by many applicants. This is especially true since the firms, which fund the proposals presented, are from the small enterprises. The only limitation with these small business loans is that they just finance a very few ventures.

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Do you have any other options?You can avail finance for your small business by selling your debts and stocks in the mass market. But again, one thing you should know is that it is not a common method of getting any help because of its difficult procedures. A large number of small businesses are now funded with the help of debt finance through financial institutions like banks. In this context, banks provide small business owners a line of credit or loan with a repayment term and schedule, as well as, a rate of interest.How can a financial institution make an educated decision?In fact, financial institutions or banks will deeply look for how profitable your business is. So, to improve your chances of being financed, just prepare a good business plan. A plan will show them the prospects of your business and, therefore, it will increase your chances to get accepted.Have you ever thought about the option of debt funding?There are many private debt investors who invest on a small business through debt funding. To make it a win situation for them, they ask for some equity ownership stakes in return. Borrowers from any class can opt for equity options. Despite having a bad credit rating that may include bankruptcy, default, arrear, CCJ or IVA, one can apply for this option without any problem. Obviously, you will need to put in some efforts for making these financial deals cost effective.

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What is the best choice that I can recommend you?You can easily apply online for your loan. This will surely save a lot of time and endeavor. Concretely, this will help you to navigate through many varieties without leaving your home. In this context, it is recommended to compare a plenty of finance choices and choose the best solution for the small business system you have. Doing this, you will minimize the risk to waste your money. To get the best of a financial deal, you will need to put in some time in research. This will help you find out the right financial option for you. In this article, the message was to list different small business finance options and the best choice is your decision.

The Different Forms Of Small Business Finance

Any small business owner in operation today is actually an incredible and solid form of business ownership as well as being an integral part of the growth and health of the economy. Quite often, when public policy and economic decision making is undergone, they look at small businesses to see how they are faring and able to withstand the various different amounts of strain and tensions that the economy is being placed under. An incredible stress of any business is the financing options available to them which requires the knowledge of the various types of small business finance.With any level of business financing, there are actually an incredible amount of options available that provide an incredible source of financing overall. Businesses must keep a very close eye on their options at all times in order to remain competitive and thing strategically regarding how they are able to move forward. Thus, understanding what all options are at all times is definitely a crucial element in this process.

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Truly, at all times, any small business must maintain a solid grip on their cash flow. Being a good cash manage is often crucial for maintaining a level of financial well being as well as not having to depend as much on financing at all. Thus, this should always be a foundational business model process.Debt financing is actually an incredible common form of small business finance available. Basically, this is where the finance company purchases the debt acquired by the business in exchange for repayment with interest. This is often performed at early stages of any small business.For those that need more cash flow, business loans are actually often a very common source of business financing. This is basically much like a personal loan and requires a solid credit standing as well as an incredible amount of potential. This should actually be something that is reserved for the harshest of economic times for any business.Investment in any business is also another incredibly common form of small business finance. Basically, this is something that involves a great deal of word or mouth and branding before it is offered to any company. Most businesses use this investment cash for expansion and upgrades to help the business grow and run efficiently over time.

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Another form of business finance is through equity finance. Most often, this type of funding requires a decent level of credit standing as well as a very solid forecast of growth and potential to attract equity financiers. In this process, the business owner relinquishes a level of their ownership in the company in exchange for a set amount of financing that requires repayment and constant reporting to the equity finance company.Finally, venture capital is often used as business finance for those wishing to take their business to the next level. This is acquired when a business is beginning the process of going public and wishing to sell themselves to the market. This funding is often used to increase the overall financial outlook of the company to make it more attractive.

Business Finance Training and Effective Business Solutions

Business finance training refers to programs that teach individuals how to handle various financial duties. Finance training is similar to finance tips in that both help business owners make better monetary decisions, but training programs offer a more detailed explanation of finance strategies. Training programs vary in price and can be used by the owners and employees of a business.The most basic business finance training provide information on budgeting, preparing financial statements, managing cash flow, strategizing, forecasting, improving performance, and applying basic procedures and concepts to more effectively manage a business. These programs are recommended for new business owners to help them understand standard business practices. Once these basic methods are mastered, more specific financial training may be looked into.

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Advanced business finance training delves more deeply into a certain financial procedure or concept, usually at a higher cost than basic programs. Advanced programs may teach business owners how to set up effective business models, make decisions based on quantitative analysis, manage and control accounts, practice due diligence, measure productivity, and strategize concerning mergers and acquisitions.Taking part in any kind of business finance training gives a business owner the resources to make more intelligent business decisions that result in increased productivity and profits. Many different types of courses are available either online or at a specified location. Some programs may even offer the option to train at the business. Taking into consideration the needs and abilities of a business is the key to finding the best business finance training.A business finance solution generally refers to methods of funding and maintaining the finances of a business. Most solutions involve ways of obtaining working capital, but others also offer ways of protecting and increasing that capital.To obtain working capital, business owners look to finance solutions that offer funding by several different means. The most common means are loans and financing. Asset-based loans use a business’s assets, such as inventory and equipment, as collateral. A business may also opt for a property loan in order to acquire commercial space. Invoice financing, such as factoring, involves liquidating or selling a business’s accounts receivables in exchange for quick funding. Some businesses look to trade financing to supply their inventory. The business will tell its financer the amount and cost of goods needed, and the financer will pay for the goods. The business then repays the amount financed over a specified period of time.

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Most companies that provide business finance solutions also offer ways to protect and increase a business’s capital. Credit protection safeguards a business from daily risks, such as customers not paying on time, so that the business does not suffer incredible losses. This makes it much easier for the business to borrow money in the future, and it protects the balance sheet. A finance solution may also offer business insurance plans that increase the stability of a business. The most common types of business insurance are employee and public liability, car, property, and health insurance. These business finance solutions are designed to protect businesses against potential losses.

Six Words to Describe Business Financing

This report was produced in a direct effort to provide more understandable insights about some of the most critical business finance issues effecting commercial borrowers. Our approach in this report is to describe current commercial loan circumstances in six words. We have adopted a similar model in other commercial finance reports such as “seven words to describe commercial property loans”. The “simpler is better” perspective reflects the belief that after hearing an almost endless number of reports about commercial lending difficulties, what small business owners might really need is a more concise explanation about these problems and the resulting impact on their business financing options.Before proceeding, it is important to emphasize that small business finance options are often more complicated than anticipated by many business borrowers. We are definitely not attempting to characterize business loans and working capital financing as either straightforward or simple. In fact, quite the opposite is the case. The unfortunate reality that most business financing processes have always been excessively complicated and that meaningful improvements are not on the way is one of our ongoing observations. We nevertheless feel that it is critical for each small business owner to have an absolute and total understanding of the entire commercial finance process in the face of the prevailing commercial lending complexity. To help in providing more understandable insights about commercial loans and business banking problems, this particular report is one of several thorough efforts on our part.

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Our first example of six words describing business financing options is “banks are saying no more often”. For any small business owner still unaware of this harsh reality and who might doubt this observation, a series of candid conversations with other business borrowers will probably remove all doubts. The failure of banks to provide an adequate level of business loans on a widespread basis is the primary point to remember. It is important for small businesses to realize that they are not alone when they hear their bank say no to routine requests for commercial financing.”Commercial property values have decreased dramatically” is a second observation. There are very few exceptions. The biggest business financing impact is likely to occur with commercial refinancing situations. Many banks are aggressively recalling existing commercial real estate loans and this literally forces a borrower to seek business refinancing even if a business owner has no interest in refinancing their commercial mortgage. With decreasing commercial real estate values, business refinancing will be a challenge for most small businesses.”Lines of credit are disappearing fast” is another six-word description of commercial financing. Even the most successful businesses need a reliable source of working capital financing, so this situation is especially serious if a business cannot replace bank financing when it suddenly disappears. Even if a business still has an adequate line of credit, it is important to realize that on a widespread basis banks are reducing and eliminating business credit lines with almost no advance notice.As our final observation in this report, “business financing is in intensive care”. Extreme measures such as firing their banker and finding alternative commercial funding sources will need to be anticipated by small business owners in many cases. Bankers have not been sufficiently candid about commercial lending problems in the past, and nobody should expect that they will publicly announce that they are in any kind of financial trouble. On the contrary, a prevailing outlook from most banks is they are lending normally to small businesses. When dealing with any commercial lender, commercial borrowers will need a healthy amount of skepticism.

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As we noted, this article is one of several efforts to help small business owners survive an extremely challenging commercial lending environment. This report was intentionally designed to produce a concise overview of several complex small business finance issues by describing commercial loan difficulties in six words. A better understanding of practical business financing options for commercial borrowers should also be realized by reviewing related reports such as “six words describing working capital management” and “seven words to describe merchant cash advances”.

Advantages of Time Management

Time management is an important aspect of life, be it work, study or during leisure time. It sounds obvious but there are a number of advantages of time management, and can end up saving a lot of time in the long run.The first of the advantages of time management is to be found in the time that is gained. Scheduling and planning activities can remove a lot of wasted time. If you consider how much time is wasted waiting around for people to be ready for a meeting, a meal or some other activity, then time management could gain you hours at a time.

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Many people believe that one of the main advantages of time management is that a lot of stress and anxiety can be removed from daily life. Knowing what has to be achieved and by when is a great comfort to lots of individuals.Another of the advantages of time management is that many people find it a great motivating tool. People often lack a desire to start a task without having a plan in front of them. Many people find that be creating individual deadlines for part of an overall task they actually have a reason to start a project. The advantages of time management therefore extend in to removing the desire to avoid a project or a particular deadline. When a piece of work can be planned ahead it is often possible to build in time to review that work. This can eliminate a lot of rushing and also can allow for any mistakes to be resolved before the work is submitted.Time management is a very personal thing and so it should be possible for everyone to plan anything needed in their life. This means that it should also be flexible enough to change as circumstances change. Some people will only plan their work, and let their free time go with the flow, and some people will plan their whole life.

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Most people like the discipline that time management can instill although at the same time some people can take it too far. Taken to the extreme, where the whole life is planned, can lead to a lack of spontaneity and people can then be accused of having no fun, although this does depend on the individuals involved.In most cases everyone can use the advantages of time management to make time for other things.

Advantages Of Time Management – Action Chasing

OverviewWhat are the advantages of time management? Exactly how many times do you land up tracking down information that you will need to achieve a task. Wouldn’t it be lovely if you could ask for the article people would like at the final minute and it would actually be ready just when you need it? Not super early but just in time. I can easily hear you all exclaiming, ‘no chance’, ‘it’s just wishful thinking’.It is simple in this situation to believe the other individual is incompetent, not a team man or totally idle. Just why should it be the other guy’s negligence? Take a proactive attitude and see precisely how you can affect the position.Let’s explore a few straightforward techniques that can serve to prevent this frustration.Deadlines:Don’t leave steps to the last minute yourself. Give the job time some ‘slack’, so that you get the important information you require in advance of when you need it. The timing should be in discussion with the person providing it. It is no good trying to get the important information way ahead of time when you need it just in time. Endeavoring to obtain details too early might be unfeasible, or the material that you do get could potentially change ahead of the time that you use it.

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Mistakes in communication:Make completely sure that the detail you need is unmistakable and agreed. Put it in writing and challenge the person if they are satisfied with the request, completely understand it or have any concerns. Exactly why do you require it and in what format? This practice is not so that people will have a person to punish in the future. A lot of requests for information are sought way in advance of a required deadline. If you don’t record it, for the person supplying the important information, it may become not so clear as the due date arrives.Diary reminder:Don’t make the mistake that others will manage their schedule as efficiently as you. Put a prompt in your diary to chase up the action. This lets people to keep abreast of development and forms a reminder to the person producing the important information.Act on continued culprits:Some people, with the best motives, will continuously appear to be too late at supplying details. Discover why. Be proactive, don’t merely presume it is a one-off. If you determine the reason and fix the problem it will be better for everybody down the road. If a person affects you with their unsatisfactory time management they will almost certainly be doing the exact same to other people. Will they require coaching in the advantages of time management themselves? Do they report to another manager that you can speak to? Strive to solve an issue to the advantage of all before thinking about any form of punitive route.

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Meetings:In a comparable vein, people not showing up on schedule for meetings may be really irritating. Adjust the approaches above to look at improvement. This is a lot more appropriate for business meetings with one to three people. For larger meetings this is less effective. The concept that individuals will attend a meeting unless they tell you differently does not usually hold up. As earlier determine the problem and respond in the correct fashion.

Business Finance Funding Advice and Commercial Financing Help

The Working Capital Journal is one of several commercial financing resources which should be reviewed regularly by small business owners to assist in keeping up with the imposing difficulties posed by rapid changes in the business finance funding climate. As noted below, there have been some surprising actions taken by lenders as a direct result of recent financial uncertainties. The increasingly complex and confusing environment for working capital finance is likely to produce several unexpected challenges for commercial borrowers.The working capital finance industry has primarily been operating on a regional and local basis for many years. In response to cost-cutting that has permeated many industries, there has been a consolidation that has resulted in fewer effective commercial lenders throughout the United States. Most business owners have been understandably confused about what this might mean for the future of their commercial financing efforts, especially because this has happened in a relatively short period of time.

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Of course, for some time there have been ongoing complex problems for commercial borrowers to avoid when seeking commercial loans. But what has produced a new set of business finance funding problems is that we appear to be entering a period which will be characterized by even more uncertainties in the economy. Previous rules and standards for commercial financing and working capital finance are likely to increasingly change quickly, with little advance notice by business lenders.Business owners should make an extended effort to understand what is happening and what to do about it due to this realization that substantial changes are likely throughout the United States in the near future for commercial finance funding. At the forefront of these efforts should be a review of what actions commercial lenders have already taken in recent months. The Working Capital Journal is one prominent example of a free public resource that will facilitate a better understanding of the responses by business lenders to recent economic circumstances.By publicizing actions taken by commercial lenders, this will contribute to these two goals, both of which are likely to be helpful to typical business owners: (1) To highlight controversial bank-lender tactics with a view toward reducing or eliminating questionable lending practices. (2) To help business owners prepare for commercial finance funding changes. To assist in this effort, sources such as The Working Capital Journal are encouraging business owners to report and describe their own experiences so that they can be shared with a broader audience that might benefit from the information. Some of the most significant commercial financing changes reported so far by commercial borrowers involve working capital loans, commercial construction financing and credit card financing. A notable situation of concern is that predatory lending practices by credit card issuers have been reported by many business owners. Some specific businesses such as restaurants are having an especially difficult time in surviving recently because they have been excluded from obtaining any new business financing by many banks.

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One of the few recent bright spots in business finance funding, as noted in The Working Capital Journal, has been the continuing ability of business owners to obtain working capital quickly by business cash advance programs. For most businesses accepting credit cards, this commercial financing approach should be actively considered. Business cash advances are literally saving the day for many small business owners because most banks appear to be doing a terrible job of providing commercial loans and other working capital finance help in the midst of recent financial and economic uncertainties. For example, as noted above, restaurants are virtually unable to currently obtain commercial finance funding from most banks. Fortunately, restaurants accepting credit cards are in a good position to obtain needed cash from credit card receivables financing and merchant cash advances.

7 Critical Business Financing Mistakes

Avoiding the top 7 business financing mistakes is a key component in business survival.If you start committing these business financing mistakes too often, you will greatly reduce any chance you have for longer term business success.The key is to understand the causes and significance of each so that you’re in a position to make better decisions.>>> Business Financing Mistakes (1) – No Monthly Bookkeeping.Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making.While everything has a cost, bookkeeping services are dirt cheap compared to most other costs a business will incur.And once a bookkeeping process gets established, the cost usually goes down or becomes more cost effective as there is no wasted effort in recording all the business activity.By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs.>>> Business Financing Mistakes (2) – No Projected Cash Flow.No meaningful bookkeeping creates a lack of knowing where you’ve been. No projected cash flow creates a lack of knowing where you’re going.Without keeping score, businesses tend to stray further and further away from their targets and wait for a crisis that forces a change in monthly spending habits.Even if you have a projected cash flow, it needs to be realistic.A certain level of conservatism needs to be present, or it will become meaningless in very short order.

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>>> Business Financing Mistakes (3) – Inadequate Working CapitalNo amount of record keeping will help you if you don’t have enough working capital to properly operate the business.That’s why its important to accurately create a cash flow forecast before you even start up, acquire, or expand a business.Too often the working capital component is completely ignored with the primary focus going towards capital asset investments.When this happens, the cash flow crunch is usually felt quickly as there is insufficient funds to properly manage through the normal sales cycle.>>> Business Financing Mistakes (4) – Poor Payment Management.Unless you have meaningful working capital, forecasting, and bookkeeping in place, you’re likely going to have cash management problems.The result is the need to stretch out and defer payments that have come due.This can be the very edge of the slippery slope.I mean, if you don’t find out what’s causing the cash flow problem in the first place, stretching out payments may only help you dig a deeper hole.The primary targets are government remittances, trade payables, and credit card payments.>>> Business Financing Mistakes (5) – Poor Credit ManagementThere can be severe credit consequences to deferring payments for both short periods of time and indefinite periods of time.First, late payments of credit cards are probably the most common ways in which both businesses and individuals destroy their credit.Second, NSF checks are also recorded through business credit reports and are another form of black mark.Third, if you put off a payment too long, a creditor could file a judgement against you further damaging your credit.Fourth, when you apply for future credit, being behind with government payments can result in an automatic turndown by many lenders.It gets worse.Each time you apply for credit, credit inquiries are listed on your credit report.This can cause two additional problems.First, multiple inquiries can reduce you overall credit rating or score.Second, lenders tend to be less willing to grant credit to a business that has a multitude of inquiries on its credit report.If you do get into situations where you’re short cash for a finite period of time, make sure you proactively discuss the situation with your creditors and negotiate repayment arrangements that you can both live with and that won’t jeopardize your credit.>>> Business Financing Mistakes (6) – No Recorded ProfitabilityFor startups, the most important thing you can do from a financing point of view is get profitable as fast as possible.Most lenders must see at least one year of profitable financial statements before they will consider lending funds based on the strength of the business.Before short term profitability is demonstrated, business financing is based primary on personal credit and net worth.For existing businesses, historical results need to show profitability to acquire additional capital.The measurement of this ability to repay is based on the net income recorded for the business by a third party accredited accountant.

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In many cases, businesses work with their accountants to reduce business tax as much as possible but also destroy or restrict their ability to borrow in the process when the business net income is insufficient to service any additional debt.>>> Business Financing Mistakes (7) – No Financing StrategyA proper financing strategy creates 1) the financing required to support the present and future cash flows of the business, 2) the debt repayment schedule that the cash flow can service, and 3) the contingency funding necessary to address unplanned or unique business needs.This sounds good in principle, but does not tend to be well practiced.Why?Because financing is largely an unplanned and after the fact event.It seems once everything else is figured out, then a business will try to locate financing.There are many reasons for this including: entrepreneurs are more marketing oriented, people believe financing is easy to secure when they need it, the short term impact of putting off financial issues are not as immediate as other things, and so on.Regardless of the reason, the lack of a workable financing strategy is indeed a mistake.However, a meaningful financing strategy is not likely to exist if one or more of the other 6 mistakes are present.This reinforces the point that all mistakes listed are intertwined and when more than one is made, the effect of the negative result can become compounded.