9 Steps to Access Capital for Your Growing Small Business

Small business funding

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.

Step 1:

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%

Step 2:

Improve your elevator pitch

A quick and concise description of what your business uniquely creates and delivers to it clients

Step 3:

Establish a relationship with a business banker before you need to access capital

  • Attend networking events, interview lenders.
  • Open a business account

Step 4:

Prepare a strategic plan that includes an action plan (A traditional business plan is not required)

Step 5:

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

Step 6:

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

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