These nine steps will enhance the level of success in securing small business financing
Preparation is job one before seeking financing in all it’s various forms. These will serve as a guide to help achive a financing goal.
Check your credit score. Address the issues. Use a 680 credit score as your goal
Major credit issues that adversely affect your score are bankruptcies, foreclosures, short sales, and loan modifications
How your credit score is impacted
- Past Delinquencies –35%
- Debt Ratio – 30%
- Average Age of File -15%
- Mix of Credit Types – 10%
- Inquiries – 10%
Improve your elevator pitch
A quick and concise description of what your business uniquely creates and delivers to it clients
Establish a relationship with a business banker before you need to access capital
- Attend networking events, interview lenders.
- Open a business account
Prepare a strategic plan that includes an action plan (A traditional business plan is not required)
Create a team that meets periodically to review your progress and problems.
The team would include:
- Owners and senior management
- Your attorney
- Your accountant
- Your marketing specialist
- A mentor or a coach and possibly an advisory board
Prepare financial information including:
- Profit and Loss Statement and Balance sheet – Update Quarterly.
- Accounts Receivable and Accounts Payable – Update Monthly
- A current schedule of existing debt – with payments and interest rates Update Monthly
- A current Personal Financial Statement for all owners of company with an interest of 20% or greater
Next- Steps 7, 8 and 9