From time to time, there may be sub-sectors of the economy experiencing turbulent and challenging financial circumstances, regardless, or sometimes due to, the strength of the overall economic performance. Times may be tough, the economy (or some part of it) may be fragile and one of the most challenging tasks is to obtain business financing in an economic crisis. Whether times are good or bad the most critical issue for any business is cash flow. Business needs a positive cash flow to survive in any economy but trying to maintain a stable business in today’s volatile times becomes a herculean task.
As a business owner, you must always keep in mind that the economic crisis has created hardships for all business owners and financing has become more difficult to obtain. The good news is you’re not alone; the bad news is that there is a lot of competition for the business financing that may be available.
Think positive and stay focused on the positive attributes of your business
You had the courage and desire to start your own business, and shoulder independently all the responsibility that came with that decision. You managed to do that, so be sure that you can maintain a positive mindset in the face of adversity. Businesses of all sizes and structures throughout the nation are dealing with the same obstacles you are. The banks are being flooded with business financing requests. Declinations are many, and approvals are few. What will set you apart from your competitors is going to be the confidence you convey when presenting your business plan.
The economic crisis is old news; we all have to deal with it. Understand that, and you will start to realize that if you genuinely believe that your business will be able to succeed and prosper, even in a crisis, then you must be, always, positive. Creating a better more positive outlook for your business will start you on your way to prepare a financing proposition that will be persuasive and attractive to lenders or investors.
Preparing your business financial crisis funding request
When applying for financing or requesting funding through a presentation to investors, there are of course traditional financial statements and other data that must be put together by a qualified CPA. You must be able to present a credible assessment of the claims you are making. Without these documents and the credibility that they convey, it will be difficult at best to obtain business financing in any economic condition.
The following list includes, but is not limited to, the documents and reports that traditionally accompany an application for business financing.
Necessary Documents that will be needed:
· Financial Statement
· Cash Flow
· Projected Receivables
· Funding Needed
· Use of those funds
· Proforma with growth projections
In addition to these traditional financial documents, you will also need a comprehensive business plan that describes in detail what your business is and why it is better qualified to receive financing over another applicant. The business plan you prepare will provide additional details of your business operations and give you the chance to convey a well thought out and positive overview of your business and explain what unique characteristics differentiate you from your competitors, and how you plan to use those to grow your revenues and bring value to your customers and your financiers. To get you started and to prepare your mind for this presentation, you can download a preformatted business plan off the internet to give you a better idea of what information should be provided.
These are just a few short tips to help you secure business financing in the economic crisis. Stay positive, remain focused and convey a confident attitude to anyone and everyone you meet.
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