TEN ESSENTIAL STEPS TO SUCCESSFUL FINANCING
By Ed Burke

In order to receive financing, a business must apply for the funds/credit to a source such as a bank, commercial lender, or leasing company. With proper planning and guidance, you can greatly influence the financing institution's "credit decision" on whether or not to extend you the amount of credit on the terms you desire. Since the credit source most likely knows little, if anything, about you or your business, it is your responsibility to educate them and get them to look favorably on your application.

1. HAVE A BUSINESS PLAN. A well-conceived, comprehensive business plan is crucial. You must clearly and convincingly communicate what you intend to accomplish and how you plan to achieve your goals. The experience of writing the business plan forces you to become more focused and specific about your business.

2. BE COMPLETE AND THOROUGH. A lender will give you an application to complete. Answer, in the detail requested, ALL the questions; fill in ALL the blanks; provide COMPLETE addresses, etc. In most cases, your application and supporting documents are all a potential creditor may see of you.

If you don't care enough to provide all the information requested, why should the lender think you are going to pay enough attention to detail to make your business succeed? It may become tedious, but everything is requested for a reason. Plus, complete applications get expedited processing; incomplete ones get laid aside for later follow-up. In which pile would you rather have your application?

3. KNOW HOW MUCH YOU NEED AND FOR WHAT PURPOSES. Be specific. It is up to you to know these things, not the lender to guess.

4. BE REALISTIC. Optimism is expected, but unrealistic expectations create skepticism. Explain how you will use the financing requested and how it will benefit the business.

5. SHOW HOW YOU WILL PAY THE LOAN BACK. Build repayment into your financial projections. Your likelihood of repayment is the ultimate consideration in evaluating your request. Collateral is important, but lenders would rather have repayment. Prove, on paper at least, that you can generate the revenues to cover your operating costs with enough left over to pay the loan and your living expenses/salary.

6. COVER THE DOWNSIDE. Most businesses don't operate exactly as planned. Identify any weaknesses or potential problems in your business and address contingency plans and resources.

7. HAVE A STAKE IN THE BUSINESS. With the possible exception of your family, no one is likely to provide 100% financing. Why should anyone else take a chance on you if are unwilling to invest your own resources?

8. PUT YOURSELF IN THE LENDER'S SHOES. Lenders want to make loans that will be paid back. They evaluate your personal and business credit history, your ability to repay based on credible financial projections in your business plan, and your collateral, among other things. If you were a lender, would you give your business this loan?

9. BE PERSISTENT. If your application is rejected, don't give up. This gives you an opportunity to fix whatever was lacking.

If you have put an honest, thoughtful effort into you search for financing, people will help you get it. That includes the people you may be tempted to blame for not approving your request. Don't think "rejection", think "constructive criticism".

10. FRAME OF MIND. Obtaining financing is not easy. Learning how to prepare a business plan and financial projections can be time consuming and frustrating - but the point is you are learning. The knowledge you gain in the process will be invaluable to you in the constant refinement that any business undergoes in both the planning and operational stages.

Remember, its up to you to get your financing. Lenders exist to make loans, not deny them. Be prepared, positive and persistent.

* The United States Business Administration ("SBA") offers advise and consulting services free of charge through various resource partners. The Service Core of Retired Executives ("SCORE"), Small Business Development Centers ("SBDC"), and Business Information Centers ("BIC"), all work in conjunction with the SBA to assist potential borrowers in preparing a business plan, doing research on a particular industry or franchise, and in general business management. Following is a list of URLs to access these sites.

SBA -- http://www.sba.gov/

SCORE -- http://www.sba.gov/BI/whatisabic.html

SBDC -- http://www.sba.gov/SCORE/tourscor.html

BIC -- http://www.sba.gov/SBDC/index.html

If you have any questions or need to discuss any projects directly, please contact me at the following location:

Edward J. Burke, Regional Manager
Commercial Capital Corporation
50 Albany Turnpike
Canton, CT 06019
Phone: (860) 693-3667
Fax: (860) 693-3672
Email: eburke@commercialcapitalcorp.com