Earlier this week, we discussed the concept of business fundability.
We covered how investors and lenders will evaluate your business’
banking relationships, experience, industry, liquidity and regulatory
compliance before deciding whether or not to offer funding.
That’s all great for informational purposes, but it may seem irrelevant if you don’t need to borrow money at this time. However, it is actually quite important for multiple reasons, regardless of your business’ current financial situation.
Let’s take a look at why you should get fundable, even if you don’t need money right now.
Most Businesses Borrow
Even if you’re the most fiscally conservative business owner on the planet, consider that 80 percent of small business owners claimed the credit crunch affected their company. In other words, four in five businesses borrow money. Chances are you’ll join the pack at one point or another and will need to be fundable to secure financing.
Know Where You Stand
Getting fundable is a great way to ensure your business is set up for success. Investors, for example, don’t pump money into businesses that are likely to fail. They evaluate various companies and invest in those who are in the best position to succeed.
Correct Problems
When you shop for a home, it’s important to iron out any kinks in your credit history before applying for a loan. Otherwise, you’ll have to either delay the process (thus exposing yourself to market risks and wasted time) or settle for less-than-ideal financing terms. In some situations, the problems may be so severe you are disqualified from getting a loan altogether.
Similarly, it’s beneficial to ensure your business is fundable before you actually need to borrow money. Otherwise, you could face inconvenient delays, lousy terms or even outright rejection.
Enhanced Credit Capacity
Once your business is fundable, it’ll be able to borrow more if the need arises. So, if you need a major equipment upgrade to grow your business, it’ll be a lot easier to finance it. Even if you don’t plan to make large purchases on credit, it couldn’t hurt to have the option if an emergency occurs.
Increased Value
Fundability can be thought of as an asset in a sale or transfer. It allows the new owner to instantly benefit from the reputation you’ve built with creditors, thereby raising the value of your business.
The Bottom Line
Getting fundable will provide a level of reassurance that your business is on the right track. Along the way, you’ll also be able to correct problems related to credit and other issues that could compromise future financing. Of course, you’ll enhance your business’ credit capacity, which will be helpful since most businesses borrow at some point.
Finally, getting fundable will pad your pockets in a future sale, rewarding you for the time and effort you put into convincing investors, lenders and the like that your business is legitimate and successful. Thus, it pays not only to get fundable for financing purposes, but to improve your company’s bottom line.
Financial Profitude
"The Essential Blog to Help Your Small Business Grow in a Global Market"
That’s all great for informational purposes, but it may seem irrelevant if you don’t need to borrow money at this time. However, it is actually quite important for multiple reasons, regardless of your business’ current financial situation.
Let’s take a look at why you should get fundable, even if you don’t need money right now.
Most Businesses Borrow
Even if you’re the most fiscally conservative business owner on the planet, consider that 80 percent of small business owners claimed the credit crunch affected their company. In other words, four in five businesses borrow money. Chances are you’ll join the pack at one point or another and will need to be fundable to secure financing.
Know Where You Stand
Getting fundable is a great way to ensure your business is set up for success. Investors, for example, don’t pump money into businesses that are likely to fail. They evaluate various companies and invest in those who are in the best position to succeed.
Correct Problems
When you shop for a home, it’s important to iron out any kinks in your credit history before applying for a loan. Otherwise, you’ll have to either delay the process (thus exposing yourself to market risks and wasted time) or settle for less-than-ideal financing terms. In some situations, the problems may be so severe you are disqualified from getting a loan altogether.
Similarly, it’s beneficial to ensure your business is fundable before you actually need to borrow money. Otherwise, you could face inconvenient delays, lousy terms or even outright rejection.
Enhanced Credit Capacity
Once your business is fundable, it’ll be able to borrow more if the need arises. So, if you need a major equipment upgrade to grow your business, it’ll be a lot easier to finance it. Even if you don’t plan to make large purchases on credit, it couldn’t hurt to have the option if an emergency occurs.
Increased Value
Fundability can be thought of as an asset in a sale or transfer. It allows the new owner to instantly benefit from the reputation you’ve built with creditors, thereby raising the value of your business.
The Bottom Line
Getting fundable will provide a level of reassurance that your business is on the right track. Along the way, you’ll also be able to correct problems related to credit and other issues that could compromise future financing. Of course, you’ll enhance your business’ credit capacity, which will be helpful since most businesses borrow at some point.
Finally, getting fundable will pad your pockets in a future sale, rewarding you for the time and effort you put into convincing investors, lenders and the like that your business is legitimate and successful. Thus, it pays not only to get fundable for financing purposes, but to improve your company’s bottom line.
Financial Profitude
"The Essential Blog to Help Your Small Business Grow in a Global Market"
Earlier this week, we discussed the concept of business fundability.
