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  • Jeff Wright

Make the Banks Compete for Your Business: The Importance (and brilliance) of Hiring a Debt Advisor

Importance of cash flow in managing your day-to-day business operations !



As a business owner, you are likely well-versed with the realities of growth in this economy, and of the importance of cash flow in managing your day-to-day business operations.


If you’re like most small business owners, when it’s time to expand, you will likely approach the bank you currently deal with, thinking that they are the most likely candidates to offer you the best rate and terms. After all, they know how great you are, and that you always make your payments on time. You assume you will get fair treatment and can go on to finance your growth without much of a ripple in the process.


Sadly, it’s not always the case. In a volatile market, some banks won’t even take a chance on small businesses. Depending on what industry you are in, you might be viewed as high risk before you even walk in the door, hat in hand.


Industries such as restaurants, construction, and even real estate speculation have huge barriers to surmount when it comes to procuring financing. It’s not unusual for a business owner in any of these realms to be forced to finance their businesses with their own savings, their homes, their credit cards, or through high-risk lenders at an inflated rate.


In any case, going it alone can be a veritable minefield of dismissal. But how about you start thinking differently. Seeking out the guidance of a debt advisor can optimize your chances for success, and as a result, banks will be competing for your business – all you’ll have to do is choose which one is right for you.


Getting educated: what you need to know before you apply for a small business loan


There are several things a lender looks at before they will even consider giving you a small business loan, and it’s important to understand that many of these points are non-negotiable. These items include:


1. Why do you need capital?


2. How much debt do you currently have?


3. How good is your personal credit, as well as company credit?


4. What collateral do you have to offer?


5. How long have you been in business?


6. What kind of terms are you on with your vendors or suppliers?


7. What does your cash flow look like?


8. What can you afford monthly on your new loan?


How working with a debt advisor can help


If this is all a bit overwhelming, working with a debt advisor may just give you the edge you need to succeed. In fact, working with an experienced debt advisor will likely help you reach your goals faster, as they can help you take control of your debt, identify any problem areas, and get your ducks in a row before you approach a lender.


When all of the legwork is done, your advisor may have some alternatives for you to consider – ones that turn the tables on the process of shopping for a loan – and invite the lenders to come to you.


Not all banks are a good fit for your business


Your advisor will also help you avoid one of the biggest barriers to success in applying for a business loan, and that is choosing the wrong bank.


It’s true, not all banks are going to be a good fit for you. Choosing one that has some experience in financing your industry will help, but this is a detail that is difficult to know unless you do a significant amount of homework. This type of background and knowledge is the expertise of financial advisors, who can tell you early on whether a lender is even going to consider your proposal.


Restaurants, for instance, are typically difficult to finance, but there are some banks that may take a chance based on your financials and past performance. In fact, there may be several banks that fit the bill, and one that will likely end up being your best choice.


The concept of bidding for loans is nothing new, but it has become more mainstream within the past 20 years. Companies like Lending Tree took the concept and turned it into a business model, brokering loan applications in search of the best terms available.


Working with a debt advisor is like that but on a more personal level. You’ll receive one-on-one debt advisement, and have the benefit of being connected to a network of lenders that you might not have even known about.


Above all, working directly with a debt advisor will give you the edge you need to look good to these lenders, helping you further your dreams of future growth. It will be like having a clear advantage, giving you the confidence to succeed where you otherwise may have had to concede.


What is your vision for the future?


If you are thinking about expanding your business and are in need of a business loan to make it happen, having a debt advisor in your corner gives you the best possible chance at securing the financing you need to move forward. An advisor can help you transform your risk into an opportunity, and attract the offers of banks and other lenders that will be of most benefit to you and your business.


Bob Doyle is Managing Partner at Gold Leaf Capital Partners, a financial services firm providing access to capital and CFO advisory to business owners and commercial real estate investors. Follow @goldleafcapital or visit www.goldleafcp.com for more information.