Crying In Your Soup, or How To Toss Your Business Funding Strategy Out The Window

Keyword: Business Funding Strategy

So you go to the bank, hat in hand, and tell your banker what a lousy year it has been. Heck, it is not your fault. You did everything right. But you are out of money. You need some money now, just to tie you over to when business picks up. How long will that be? Gee, you aren't really sure, but it shouldn't be too long.

Who the heck do you think you are kidding?

The banker knows you are broke, and have no business funding strategy at all. And that you have NO PLANS to do anything different. And that you are going to fail, whether it is this week or this year. And if you are smart, you know it too.

What would you do if one of your customers came to you and asked for financing with NO business funding strategy in place? And further insulted you by being delinquent on his bill? And didn't have a clue on how to get out the mess? Just how much would you lend?

Well, that's how much the banker is going to lend you.

It doesn't matter if your business funding strategy is for $1,000 or $1 million. If you cannot show how that money will be used to generate more income, you won't get it. Period. "Holding on" just doesn't cut it. Nor does "operating capital". Those terms sound the death knell for business financing.

I was talking with Pat, my neighborhood banker, yesterday. She told me she absolutely cringes when she sees small business people walk in the door. She knows she is in for a sob story, and there is NOTHING she can do about it.

So I asked her what business owners should do. Well, she told me about an entrepreneur who came in about a week ago, a big smile on her face, a nice, confident handshake, and business plan in hand. Saundra, the entrepreneur, introduced her company, and even pulled out a laptop to demo the company's website. This is a fairly new company, and one that the bank wouldn't usually be able to work with. But Saundra brought in copies of contracts and proved how the bank's money would be used to generate income. So Pat went to bat for her. They are structuring a proposal that includes equipment leasing, line of credit and long term financing. Pat believes it is is going to go through.

Now THAT's a business funding strategy.

So you don't have any new business? Well, go get it. Can't? Then don't bother looking for business financing. It just isn't going to be there.