When investigating capital raising and loan funding, the biggest challenge is to have a compelling story and financial reporting to satisfy the needs of an lender or investor.
With this alternatives can be considered, such as private equity in addition to debt.
Here are some ideas from a debt advisor to increase the chances of getting the capital you need for your business.
The Good Story. A robust and realistic bottom up business plan stressing stability and financially feasible growth. Include a projected income statement, balance sheet, and cash flow with a working capital analysis
Get to Know Your Lender. Maintaining close contact with your lenders to let them know you will always be is an ace in the hole. And having more than one is better. You should then also understand their typical loan size they offer what kind of businesses do they focus on and their terms approval and decision making process?
Consider Receivables Based Lending. Typically, such lenders advance against the current assets of a business. While interest rates are traditionally higher, it is a viable alternative.
Private Equity. When considering , ask how involved will the equity provider be in the daily operations and will this firm have a exit strategy that matches our goals.
Hire an Ex-Banker. It’s the closest thing to an unfair advantage you’ll get, if you have someone with lending and credit experience. Or ask your accounting firm if they have a Debt Advisory service?
Sources: Web article at web article & and interview with Paul Wright – Debt Advisory Services Partner at Matthews Steer Charter Accountants