Small Business Funding feels elusive and hard to obtain, but that's not the case.

Business owners feel like this:

In my experience working with business owners, lending institutions and other financial avenues, the truth is that most business owners have not made themselves students of finance.  Oh sure, they can handle banking, payroll, accounts payable and receivable, and the multitude of other financial matters that a business owner deals with; but this is usually done by need and to manage crisis, not with strategy and future needs in mind.

So when the time comes that business feels a cash crunch, or a positive opportunity to grow, expand, seize market share etc. they do what most every business owner does.  They walk down to their local bank, hat in hand, and say ” I need money for my business, can you help me”?

This leaves the business owner vulnerable to many unnecessary negatives:  quality of the business lending person they sit across from, quality of the bank they are asking, quality of the products and appetite of that lender to offer money to businesses, quality of personal credit, business credit, financial documentation and business plan.

If  you are a business owner reading this, and my words resonate with you, please understand this is common.  So don’t feel bad or guilty or inadequate.  This just simply means you have not YET learned the steps which will help you to grow, nor taken those steps YET so you can grow now.

The good news is that you can AND WILL do these necessary things and continue to work at them, making them an essential part of your business growth over the years.  It’s called Leverage.  And for a Business, leverage is GOOD.  Cash when you need it is vital.   Like blood and oxygen for the body….cannot survive without it.

Would you drink water from a puddle in the street?  Absolutely not, right?  But if you were dying of thirst you would, you betcha.  Hopefully your business is not dying of thirst in the desert, and hopefully you have time and staying power, tenacity and desire to learn and grow your business  properly, so that you are not forced to ‘drink from dirty puddles’ of poor terms in borrowing.

I will be discussing many topics about this over time.  15 years in banking and lending and financial services, working for some of the largest financial institutions in the country and the globe, I share knowledge because I personally enjoy giving away for free what I have learned in my years of hard work, dedication to my own personal understanding of business and entrepreneurship.

To get started with some ideas for the every day business owner, please take a few moments to analyze your self and your business and answer these questions for yourself:

1.  How is your personal credit, and what are you doing to protect it, improve it, monitor it?  It all  starts with you.  Most business funding requires personal guarantee until the business has strong credit and financials.  Get a credit report for free www.annualcreditreport.com  and see what your credit report looks like.  This site offers free report which you are legally entitled to once a year from each of the 3 bureaus.  There is a process to challenge and dispute items.  This is free, no subscription required, and it doesn't count as an inquiry.

2.  How is your business credit?  Does the business have a DUNS number?  Have you set up a Dun & Bradstreet profile?  Do you have a Paydex score?  These are basic starting point for business credibility, which almost every lender will check before they lend you money.  Some do not require, and your business can borrow without, but more leverage (borrowing)  is available if the business DOES have these.  The good news:  it is a process, anybody business owner can do this, just need to be willing to learn and work at it patiently.

3.  What credit does your business already have?  Have  you recieved offers for more credit?  Sometimes it is good to accept offers even if you don’t need the money at the time, good to have handy for when you need it.  Also, lenders and institutions you already have credit with can be asked to increase the amount(s) / terms.  ie.  increase a line of credit, extend your repayment terms.

4.  Who do you bank with for your business?  Are they accomodating for business lending?  Have you asked them what is available?  Your deposits go into that institution, so make them earn your loyalty!  Get some mileage out of your relationship with them.  It is not a bad thing to open a relationship with 2 or 3 more banks on the deposit and transactional side.  Banks will seek more of your business and make  you offers over time to enhance their relationship with you (get more of your money sitting in their institution at pitiful if any interest paid to you).

5.  What do your financials look like?  Do you have a PFS (Personal Financial Statement) for yourself and your business and keep these updated?  if not, you must absolutely learn how to do one of these for yourself.  It’s like eating and breathing.  You will struggle until you know how to prepare and maintain this for yourself and your business.  So best get to learning that as soon as you can, and don’t shove this off on your book keeper, accountant etc.  They probably don’t know how to do it either and will procrastinate.  Plus, only YOU know YOUR business as the owner, so take ownership of how your financials look when you show them to others.  If this is non-existant or poorly prepared, then how could you expect an institution to lend significant money to you when you don’t exactly present yourself well

6.  Business plan.  Do you have one?  many free online templates exist, also something you want to do yourself, nobody has the investment in your business more than you do, so nobody will care about your business plan as much as you.  Some resources for this are SCORE society of retired executives and entrepreneurs.   A non profit organization that will match you up with a free business coach to help you.  HELP, not DO for you.  Also you should scout around your area at the local colleges and universities.  Most business schools will eagerly pair you up with MBA students to help local businesses prepare business plans.  Plus students are free, eager to work on fun projects and learn, and usually have some free time to devote to a project like yours.

Hope you enjoyed this and other items I write about,  and with best regards,