How to evaluate your business’ financing needs
- Author Yury Iofe
- Published September 9, 2010
- Word count 428
Business financing should be carefully planned long before a particular project takes place. The success and longevity of a business by definition will depend on its carefully chosen Financial Structure. Let’s do it one step at the time.
First you need to know exactly what you are planning to do:
Starting a new business?
Exploring opportunities for an existing business?
Buying a competitor?
The second question you should ask yourself:
Do you have enough capital or you need to obtain an additional financing for your project?
If you require financing and you want it to fit into your business structure, you need the right financing at the right time.
In order to appraise your business’s financing needs ask yourself the following questions before seeking financial assistance:
Q. How soon do you need the money?
A. In order to get the best possible terms for you financing it is always a good idea not to do it in a hurry, to have a time cushion.
Q. Have you evaluated you business’ risk?
A. The more risk you have the less favorable terms or financing you will get. If you do not have enough knowledge on this topic, you can hire a financial professional to do that.
Q. What is your business development stage?
A. Start ups are more vulnerable and need more cash than established businesses.
Q. What is the purpose of this loan?
A. Start up, business opportunity, etc.-You will have to define it to any
borrower.
Q. Do you have a professionally written business plan?
A. The most important information any lender will require is a business plan (your business plan must evaluate your business and show your ability to pay back a loan).
Q. Which industry your business belongs to?
A. It is much harder to get financing for depressed than for stable and growth industries.
Q. Is your business cyclical or seasonal?
A. Loans designed for cyclical industries, such as construction, are usually issued with a longer terms than loans for seasonal industries.
Q. Can you show a strong management team that has enough experience in the industry to convince lender to give you a loan?
A. The answer should be yes, otherwise chances of getting financing is
very low.
Before seeking financing please become knowledgeable on the topics above. The knowledge will help you when you work with lenders and will give you a competitive advantage against you competition.
Yury Iofe, MBA
Universal Business Structured Solution
More educational resources by Yury Iofe:
www.ubssolution.com
http://www.ubssolution.com/Education.html
My name is Yury Iofe. I have over 15 years of Diversified Financial Experience. I am an MBA in Finance.
I am a Former Senior Editor with AICPA. Consulted numerous (including Fortune 1000) companies on different business issues such as: Financial Reporting, Financial Planning, Taxes, Business Financing, etc. www.ubssolution.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Maximizing Profitability: The Economics Behind Customizable Design Assets
- Can Statements of Work (SOW) Be Strictly Non-Labor?
- The Impact of Digital Transformation on Lebanon's Employment Landscape
- Boosting Lead Generation with Effective Local Search Marketing Strategies
- Unlocking Efficiency: How Payroll Outsourcing Can Save You Time and Money
- Unveiling the BCG Growth-Share Matrix: A Strategic Tool for Portfolio Analysis
- Project Managers & Stakeholders: Channels of Communication
- Closed Cell Insulation: Your Ultimate Guide
- Leading A Successful Project In A Turbulent Time
- Project Planning
- A Manager's Perspective - Dynamics of the private education industry
- Permanent or Temporary Staffing: Which One Is Right for Your Business?
- Crafting Corporate Culture: Empowering Teams for Success and Fostering Diversity through Strategic Partnerships
- Elevate Business Operations in the UAE | Connect Resources Your Trusted Employer of Record Partner
- Thinking Outside the Box: How Divergent Thinking Boosts Creativity
- The Ultimate Guide to Launching Your Dream Glamping Business
- The Impact of Agile Leadership on Team Enhancement
- Top Strategies for Boosting Your Construction Team's Performance
- Elevating Corporate Success through Relationship Asset Management (RAM): The Chief Relationship Officer's Vital Role
- 5 Strategies for Becoming an Inspiring Leader
- Are you a Leader—or a Dinosaur?
- Networking—Basic things to know
- Lessons from a Farmer
- Think like an Entrepreneur
- Maximising ROI at Your Next Corporate Event
- Hiring Your Leadership Team: The Best Traits for the Best Employee Experience
- Reqi: Your Ultimate Requirements Management Tool
- Hiring Insights and Tips from a COO with a Psychoanalytic Mindset
- Micromanagement Stifles Creativity and Growth
- TIKTOK INFLUENCER MARKETING