Business Credit & How to Acquire It...Getting Financing For Your Business

Business Credit & How to Acquire It...Getting Financing For Your Business

There is no magic pill to take that will make you business "bankable." As you would expect, banks make loans with the goal of being repaid, thus some of their primary concerns will center on your most recent past history, experience and the basics of your business itself. Frequently however business owners instead will look at a bank in the hope that they will do Venture Capital (VC) funding. VC funding is commonly used when you have a new business idea or a start up venture that is more speculative in nature. This could be for either an established business or a very new one, but the central theme in VC funding is that there is more uncertainty and much more risk that one would find in traditional bank funding.

Building Your Credit in the only true way that matters evolves over time as you build your business over time and develop a documentable track record. For example, when I initially started my CPA practice over twenty years ago, it is difficult to gain a loan in the tens of thousands. Now however, banks are more than willing to grant and extend credit in the hundreds of thousands. There is nothing about me that has changed. I am still a CPA and have remained in my chosen field of profession. However that is where the similarity stops as over time my business has developed a following, a predictable cash flow and a track record. I cannot recall all the times I have watched in my career as a CPA in Atlanta where business owners have failed to prepare; which is in essence, preparing to fail.
Banks want to see that you have been a good steward and that all that you have managed to date that you have done so with care. Often this means that you will need to make financial decisions that by worldly criteria are unpopular, choosing to manage money, while answering to a higher standard and by conservative standards. This means that frequently you will pass on business opportunities, turn down credit and have a mental attitude of being debt averse. In fact, the best way to ensure that you have money down the line, is not to spend it. Doing so will require you to pass on business deals that sound too good to be true and that you will work to stay out of debt and then to liquidate it, when you acquire it. Though this is not the way the world sees money, it is the best way to ensure that when you seek to obtain credit for a valid business proposal and expansion of your business that banks and traditional lending sources will be on our side with their checkbook ready.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com/