BUSINESS FINANCING

Do You Struggle To Get The Financing You Need To Move Your Business Forward?

Businesses have two ways to raise capital: debt and/or equity. Selling equity will give a shareholder an ownership stake and does not need to be paid back, however, the new shareholders (owners) will want to share decision-making authority with the original founder(s).

Debt, on the other hand, represents a claim on the future earnings of the business. However, once the debt is paid off, the lender has no say in business operations or claim on future earnings. Debt is the preferred way to raise capital for most closely held businesses; but there are clauses in all loan agreements (some harsher than others) that can cause your business severe operational problems if not maintained. Here are a few issues that you should be aware of:

Cross collateralization
Debt to worth ratio
Current ratio
Working capital levels
Debt service coverage ratio
Cap X limits
Guarantee(s) collateralized or non-collateralized

Fees: packaging, loan origination, renewals, appraisals
Real estate and equipment valuation methods: liquidation, market, hybrid
Advance rates on accounts receivable and inventory
Advance rates on new or used equipment and real estate
Interest rates
Prepayment terms and asset release clauses

All banks are not the same and each underwrite differently. Government programs are written the same but are interpreted differently by each institution using them,

Financing in your future? We can help a number of ways: