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17 Organizing Musts to Successfully Finance Your Next Business Step

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Boulos Michael, CRPC®, AAMS®

Wealth Advisor; Managing Partner
Stewardship Wealth Management Solutions
Office : (714) 455-2955
Schedule a meeting

Successful businesses grow. Is yours ready?

When these good things happen, it often requires money to convert opportunity into reality. A busy dentist hires new technicians and buys new equipment, or perhaps rents or buys new office space. A bicycle retailer might buy more bicycles to have in the shop or carry a wider range of helmets. A successful restaurant owner may decide to enter a complementary business, such as catering.


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Where does the money come from?

When you've decided to take your next step, you need to find the right place to secure your funding . Obvious choices include banks or credit unions. However, they can be difficult to qualify for without strong personal credit and a solid track record. Some banks offer loans backed by the Small Business Administration (SBA). If you're large enough, you may find yourself seeking a venture capital firm. Less-traditional options include online peer-to-peer lending platforms , microfinance institutions , accelerators and incubators; and angel investors may want a share of the business in exchange for their capital.

17 things to organize before asking for funding

Good looks and shiny shoes aren't going to be enough to convince somebody to hand you money. No matter where you look, the money will come with strings. To provide a clear financial overview of your business, assemble and organize these 17 things:

  1. Provide a loan proposal . This will describe how much money you need, what you'll do with it and how you intend to repay it. Also, provide a backup plan in case this doesn't work; lenders want their money back. List your business and personal assets. Where to get it: You build this yourself. Lenders and internet research can probably help you with structure.
  2. Balance sheet . Your bookkeeping will provide the data you need to provide this list of assets, liabilities and owner's equity in the business. If you've never put one together, here's a template you can use.
  3. Profit and loss statement . Any lender is going to qualify you based on how much money you're making . Your bookkeeping and past tax statements contain all the data you need, such as receipts for rent, supplies, marketing costs and more.
  4. Cash flow statement . Lenders will want to know whether you can cover your expenses and where you'll get that money. At its simplest, this is cash that comes in less cash that goes out. All those receipts and other records — for resale items purchased, payments to suppliers and more — will be in your bookkeeping records.
  5. Business and personal income tax returns . Based on your bookkeeping and receipts, these give potential lenders official verification of what's on your application. If yours is a smaller business, the lender may want your personal guarantee. The personal return supports that.
  6. Business and personal bank statements . The lender will want both of these for the same reason it wants your tax returns.
  7. Driver's license photo . Not just identity proof, it's proof of residency and enables the lender to cross-check other information.
  8. Commercial leases. Any leases you've signed for property or equipment will be required. You should have these in your files.
  9. Business licenses. Most businesses are required to be licensed by the state and municipalities in which they operate. Scan, photocopy or photograph.
  10. Articles of incorporation . If you're incorporated, these would have been required and should be in your files. Scan, photocopy or photograph.
  11. Proof of collateral . This could include property title, vehicle title, bank statements and inventory.
  12. Business plan . You should have written this when you started your business, and it should be in your records. This describes your financial projections, analysis of the market and your marketing and sales strategy for achieving your goals.
  13. Financial projections . Newer businesses may wish to calculate these as a separate document. It will include any information in your balance sheet and profit and loss statement. Explain your planned expenses and their relevance. Include a breakeven analysis and the assumptions for the numbers you're providing.
  14. Debt schedule . Every loan, line of credit, lease, bond and other liability you have should be in your bookkeeping records and contribute to your cash flow. They include loan agreements, promissory notes and proof of payment (receipts and bank statements).
  15. Legal contracts and agreements . If you don't have your copy, your lawyer or the other party in the contract should.
  16. Resumé . From your files, this will confirm your expertise in your business.
  17. Succession plan . This document would delineate the steps that will be taken should you be unable to continue in your role: Will the business continue, and, if so, who will run it?

Getting your stuff together

Your potential lender may want physical copies of your information, in which case you'll have to gather these items and bring them with you for them to photocopy or scan. They may have an online application that enables you to upload these documents as PDFs, word-processing or text files, spreadsheet files, scans or more.

As you gather these items, scanning or creating digital copies in a computer folder may be the simplest option. Back all of these up (if you aren't already) with a program like Apple Time Machine or Windows File History, or use an external hard drive, thumb drive or cloud drive (such as Dropbox or Google Drive). You may also find it helpful to have your tax accountant or lawyer keep these on file at their office.

One option that covers a lot of bases is a Document Management System (DMS). These capture receipts and more to generate financial reports. They can capture other non-financial data (such as a business plan or copies of your licenses or contracts).

Organization for success

Applying for financing can be daunting, but it need not be complicated. If your records are well-organized to start with, you can just grab them and convert them to the format the lender requests. If they aren't, get started. Either way, good records make good financing and future success possible.

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Boulos Michael profile photo

Boulos Michael, CRPC®, AAMS®

Wealth Advisor; Managing Partner
Stewardship Wealth Management Solutions
Office : (714) 455-2955
Schedule a meeting