Most lines of credit mature five months after fiscal year end. For 12/31 companies that means the end of this month. Before your banker calls and schedules a closing for the renewal, there are 4 things you should know: 1) Did I comply with all the terms and conditions? Was the line used for…
You may have discovered that bankers unintentionally speak a language that business owners have a hard time understanding. I call it BankSpeak. Bankers use terms like liquidity, leverage, profitability, working capital, cash flow, EBITDA and sometimes don’t explain the context or the calculations behind these terms and how they might impact your business positively or…
Trying to get a line of credit? Frustrated with the bank process? You’re not alone. Navigating the banking landscape can be a very time consuming process. There are two questions you need to answer before you start: Are you bank ready? Are you bankable? What is bank ready? Bank ready is nothing more than being…
Trying to get a line of credit? Frustrated with the bank process? You’re not alone. Navigating the banking landscape can be a very time consuming process. There are two questions you need to answer before you start. Are you bank ready? Are you bankable? What is bank ready? Bank ready is nothing more than being…
What is leverage? Leverage is the use of borrowed money to increase sales and profits. It is measured as a ratio of total debt/total equity. The greater the amount of debt, the greater the leverage you have in your business. I think I bring a unique perspective to this topic because for 32 years of…
Generally, starting a business with an SBA loan is incredibly hard due to no historical track record of cash flow and ability to service the debt. Banks are looking for at least three years in business before extending credit. However, it’s possible if you find a bank that is willing to do startups. Many banks…
It seems like there are almost as many lenders with financing offers as there are restaurants, but if that’s the case, why is so hard to find financing for your business?
A very successful business owner and mentor of mine used to say, “The path of least resistance is what makes men and rivers crooked.” In your business, the path of least resistance is using a credit card or some other form of borrowing. Before you know it, the amount of debt has piled up, the…
Many business owners look at their profit and loss statement and determine if they’re profitable or not. How is revenue tracking against last month or last year? Any changes in gross or net profit margin? If I’m making money then everything must be ok. There is some validity to that way of thinking.
Two things have become increasingly apparent to me. If you’re a big company, you have good access to capital and can find the funding needed to finance your business. Small companies don’t have that access to capital and finding funding is difficult. Here’s why:
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