Business Funding Secrets
Business Funding Secrets

Business Financing
in Today’s Credit Crunch
 

Tightening credit has turned into a worldwide financial crisis. So what happens now? What are the secrets of getting a business get funded in this financial climate?

 

Restaurants, hotels, and other businesses that are part of discretionary spending of peoples’ budgets are going to be extremely difficult to fund. It has been reported that even the industry giant McDonalds’ restaurants have had difficulties getting loans for its franchisees. Considering that, it is easy to see how difficult it will be for smaller companies.

 

There are still huge amounts of money out there, governments are adding liquidity and attempting to ease the crisis. However, banks and finance companies will continue to be reluctant to take on higher risk funding. They do not want losses on their books.

 

Funding requests have not declined with the credit crunch. With fewer deals getting funded business owners are required to submit their requests to an ever increasing number of sources. Each funding source will require a new application and may request different information. Many business owners are already getting frustrated with the stringent and time consuming process. Due to this, some business owners’ frustration levels have gotten to the point they are getting sloppy with their presentations. They are throwing up their hands, so they want a Funder to do the same and just accept the deal. Horrible mistake! Frustration is understandable, but laziness and sloppiness won’t get a deal funded. Garbage in - garbage out.

 

We are in a “washout” period. Those that can dig in their heels and fight have a chance of winning. Quitters will be out of business. There are expectations of many business failing during this credit crunch.

 

For those that are willing to fight they should be putting together excellent business plans. Provide: detail, detail, detail. Lenders are not going to be accepting loan packages from somebody trying to sneak something past them. Provide quality information and back up everything in the presentation with supporting documentation. Many lenders are having their own difficulties, so don’t expect them to be handing out money for sketchy businesses. Expect the due diligence hurdles to be higher. If the business is already in a position where it can’t afford to pay for appraisals, valuations, and other due diligence don’t expect the funding request to lead to anything.

 

With that said, there are still a number of quality lenders, which can provide SBA loans for traditional businesses with positive cash flow. There are some investors, which are willing to do joint ventures on large real estate deals. Commercial real estate still has a large number of potential funding sources.

 

There are lenders that are also targeting medical practices, pharmacies, health care facilities, and other professional licensed businesses. Businesses servicing the government, or supplying everyday necessities (non-discretionary spending products) are companies that should have solid sales and the ability to get funded.

 

For Financial Consultants and Reps who need a recession proof project to generate commissions contact Business Funding Secrets and ask about our "Targeted Project."
 

Business owners who may not qualify in today’s tight credit market will need to look at cash flow financing, equipment leasing, and equipment sale lease back.
 

If you have a source of business funding and you would like to present to the readers of this article and the newsletter Business Funding Secrets, educational articles are being accepte.  Also, Funders and Consultants specializing in specific business financing are welcome to submit their profiles for a new web page directory.

When the financial picture isn't looking rosy, don't give up. Don’t be a quitter. Look for alternatives. There are solutions out there.

Tips:
1. You can’t control the credit markets, but you can control your spending. Sacrifice. Downsize. Save money. Spend less.
2. Adjust sales and profit projections to reflect what is currently happening and will likely continue to be happening for the next few years.
3. Set grandiose dreams aside for now. Be humble. Know the downside - don’t bury your head in the sand. Stop watching TV and work more. Look for alternative income streams either within your business or in new businesses.

 

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