Archive for August 2009
Are you looking for money in this tough lending environment? Have you done your homework? Lenders don’t hold your hand and they won’t tell you what you’re doing wrong. They’ll just say “No”.
Here are a few points to make you better prepared for approaching a lender:
- Have you tried to restructure your cashflow? Perhaps you really don’t need a loan. Rather you need to run your operations more efficiently. If you haven’t considered this go no further.
- Is the loan an urgent or an important need? If it’s urgent and the bank or funding source smells desperation…it’s not a good scenario for reaching a yes answer.
- What you will use the money for? Can you provide a use of funds schedule that is defendable? Think equipment purchases and job creation to be convincing.
- Does your business plan support your need for financing? Funny how we can stray from the original purpose of our business and then find we need more capital. If your financing requirements and your business plan don’t align you should not approach a lender until they do. This may mean you shut down a part of your operations and then find you no longer need a loan.
- What does your organization chart say about your company and your management style? You don’t want the lender to conclude the team you have in place can’t execute the business plan you present. If you are thin at the senior level consider forming an advisory board. An advisory board will show the lender you are committed to covering the gaps even if you can’t hire. Be able to explain the situation so the lender can approve your request.
Please contact me if you need an objective review of your lending request.
Understanding how tough it is for anyone to get money, the SBA and Congress have created resources to help veterans start businesses. Here are a few of the programs:
- Patriot Express Pilot Loan Program, administered by the Office of Veterans Business Development at the SBA
- Military Reservist Economic Injury Disaster Loan. Also administered by the Office of Veterans Business Development.
- Veterans Transition Franchise Initiative. Known as VetFran, the site states: “VetFran.Com is a franchise opportunities portal owned and operated by the International Franchise Association on behalf of its members. This site is for honorably discharged Veterans of the U.S. Armed Forces who are interested in going into business for themselves, but not by themselves.”
You can also checkout the article that appeared in Entrepreneur magazine on these programs.
If you are interested in discussing your start-up idea please contact me. The initial one-hour consultation is free. After that fees will be discounted in recognition and appreciation of your service.
The July issue of Entrepreneur included a helpful article addressing how to get paid. Timely payment or payment at all is an ongoing problem for many small business owners and likely to continue for the foreseeable future.
The article discusses the various scenarios we’ve all probably heard and how to counter them to collect what is due you. For instance:
- A customer now wants to pay in installments, the author recommends the first installment be due right now.
- A customer claims personal matters are preventing payment from occurring. Remind the customer that creating credit issues will only compound the personal problems.
- A customer is a friend who is using the relationship to extend the payment time. Remind this friend of the perils of impairing his credit rating and what can’t happen with future rush orders.
The article also discusses how your business systems maybe setting you up to be paid late.
I recommend reading the article even if you’re fortunate and have no late paying customers. You just never know…
