The Georgia Scroll
January 1998
The Profitmaker’s
Top 10 Tools for FINANCING Businesses
As Used in Two Dozen Financings Totaling Over $400 Million
1. Understand Your Debt/Equity Needs = Evaluate both areas before financing the wrong one!
2. Lenders Do Business with People They Like = Market yourself and your company on a regular, periodic basis long before you need to expand your line or select a new lender and/or investor.
3. Match Business Plans to Financial Audiences = Investors and lenders have different preferences; try packaging your presentation appropriately.
4. Identify Your Company’s "True Assets" = You have "assets" far beyond the ones on your balance sheet. Identify and match these parameters to lenders.
5. Tune Up Monthly Reports & Current Results = The pressure is on to produce good monthly results once serious discussions begin; be well prepared with smart, timely reports & numbers.
6. Pursue Many & Varied Lenders = You may like a particular lender or have heard of a good one, but you’ll find the best match by shopping among many and matching your "true assets" to their "true preferences".
7. Know Your Position on Terms = Some lenders don’t need the "deem insecure" paragraph; by knowing what you really need you’ll put together the best deal.
8. Network to Find the Best Lenders & Deals = Others have run this race before, so network broadly to your advantage. TEC members are great resources in this area!
9. When You Switch, Do It Nicely = You may need that old lender sometime again in the future, so burn no bridges! Exit nicely.
10. Eventually All Relationships End . . . and so does the lending! Bank mergers, personnel transfers, and a mere drifting away will end your deal. Remember, the document will dictate what happens at this point.
Prepared by Kraig W. Kramers—President & CEO of Corporate Partners, Inc.