|
Home | | | Fees | | | Resources | | | Testimonials | | | About | | | Contact | | | Blog | |
|
|
If Only I had More Cash…
I hear it all the time…the pressing need for more cash. Do any of these sound familiar? I bet one or more do. The need for additional cash is universal. It's like gasoline for the engine, without it the car does not move forward, with it you can go as far and as fast as you want to. Most every business owner and manager at one time during his daily work effort bemoans the fact that he needs more liquidity, credit, borrowing power, and cash reserves than he currently has, and thus his efforts are restrained. "Greater success is around the corner, if only I had adequate cash." This is a very solvable problem. In fact the lack of available capital is more of a myth than a reality. In today's market there are numerous avenues available to support most business requirements for additional capital or credit, but like most issues, one needs a plan and a strategy designed to resolve this problem. In today's low interest capital market, borrowing for good business purposes is worthwhile, fairly inexpensive and more easily accomplished than most business managers imagine. Let's bust some myths. 1. I am not credit worthy and cannot borrow. My business had some problems and my bank tells me I cannot borrow more. This may be true with traditional banks, but there are many non traditional private sources to borrow from and part of the solution is to find the sources for your borrowing needs. The lending market is huge and diversified and there are many different types of lenders willing to lend into unique and different business situations. Frequently a good commercial broker, a financial advisor, or an accountant can help. there is cash available, but you may need to consider seeking professional assistance and it is frequently not your friendly banker. This will add expense but is well worth the successful conclusion. 2. I believe I am in good financial shape but my banker says my ratios are off and he cannot lend more cash to me. Another resolvable issue. Improper presentation and lack of effective documentation and specific information, not always asked for, prepared to support a loan application is often the blunder, and the banker is often unwilling to help you correct the matter and simply rejects the loan. You may want to consider a professional who can effectively package your loan request so you get a yes instead of a no. 3. There may be other ways of creating a better presentation, more likely to succeed, by resolving unforeseen issues before they cause a rejection. For example, inadequate accounts receivable collection practices showing good receivables over 90 days, which will be discounted by the bank and will impair your financial presentation reducing your cash flow availability and lowering the amount you can borrow are frequent issues which can be corrected prior to presentation. Productivity inefficiencies, too small a profit margin, too much inventory, too high a payroll, all can be restructured and disclosed in a more favorable light if properly addressed in advance. Often you can get one bite at the apple and if done incorrectly you cannot redo it, so it is best to do it once and do it correctly and succeed. A professional can help resolve these issues and present a better application more likely to succeed, and his opinion adds credibility to the presentation. 4. Your tax structure and strategies could be improved through effective organizational planning and cash management strategies, which could make a huge difference in creating a better borrowing potential. 5. A clear projection of the positive impact additional capital will have on your business is another helpful strategy. In addition you will want to demonstrate the ability to pay back the loan thus cash flow projections and other representations are often required. 6. I am in horrible financial condition, I must borrow to survive as I desperately need additional liquidity and my credit is awful. I have tax liens and lawsuit judgments. I cannot borrow until these are all cleared up and I need more cash to do this. What can I do? There are sources for borrowing that understand these issues and will provide adequate capital to both resolve the problems and provide you with additional operating capital, so in the end the lender has helped you remove the issues that prevented borrowing and now has a great business with no issues and a bright future and a good loan. This will add cost but is well worth it. DMT&Associates have aligned themselves with an extremely talented mortgage broker who has affiliations with over three hundred lenders, covering the full spectrum from hard money borrowing for the most impossible situations, when you have to have the money "tomorrow" to people and businesses with the best credit possible. We select the best lender for every situation as every situation is unique. We always close no matter what the circumstances. So the next time you hear yourself saying "I wish I had more capital" your wish can come true. It may require additional support and expertise, and it may further require some "house cleaning", but it is available. You may simply require a more effective strategy and some professional assistance. Back to articles |
|