Funding is a constant need for every business no matter where they are in their journey. Maybe your company is now ready to grow, and you need funding options to help it grow.
If you are seeking funding, it’s imperative that you identify why you need it in the first place, as well as how you will use it. With a clear reason in mind and a spending plan in place, securing funding becomes much easier whether you need equipment to pay off debt, hire new employees, or prepare for an emergency.
After determining the reason for seeking funding, it’s time to take a moment to look at your current financial situation.
PERSONAL OR BUSINESS CREDIT:
You should check your personal and business credit with each of the three major credit agencies before requesting more funding. Once a year, you should be able to request this information for free through Equifax, Experian, or TransUnion.
You can invest in your business by taking stock of your available assets. In order to get the most accurate assessment of your financial situation, it is advisable to meet with your accountant or financial planner.
Check your checking account and savings account, as well as any collateral you have. Collateral is often required by lenders to ensure that you are a serious borrower and can repay the loan. You should discuss your financial situation with your accountant or financial advisor for the most accurate advice.
PERSONAL AND BUSINESS DEBT:
Identify any debts you may have, either personal or business. Examples include student loans, home loans, car loans, etc.
VALUATION OF BUSINESS:
Consider a business valuation if the situation warrants it. You might have to provide an investor with one before they consider lending to your business. To put it simply, a business valuation is the process of determining the economic value of your company.
In most cases, no matter what your business size is, this process involves a complete and objective evaluation of each aspect of your company. Basically, anything that has economic value that your company owns, including equipment, inventory, property, liquid assets, etc. Also consider your management structure, the number of your employees, your revenue, and your projected revenue. Before beginning the valuation process, speak with your financial team.
You will then seek funding after you complete these assessments. By doing this work on the front-end, you will be able to take your business in the right direction.
MCDA CCG offers Financial Consulting Services to give you a better understanding of your needs and how to properly get there in the early stages of your new business.
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