Discover the Keys to Unlocking Your Lender’s Cash Vault

You want financing to increase your revenue and profitability, but do you really know what a lender or investor is looking for? Well pay close attention because, regardless of whether you want $5,000 or $500 million dollars, lenders and investors want pretty much the same thing. They want a transaction with minimal or no risk.

No surprise there, huh? Well how do they determine the level of risk associated with a transaction? There is no short answer to that question, but we can start with a responsible, experienced and innovative management team. They look for management teams that:

• Are interested in building a sustainable and profitable business model
• Has industry experience in developing a successful business
• Works well together, complementing each other’s collaborative style
• Has skin in the game from investing their own funds in the business
• Has a management integrity that incorporates respect for their employees

Strong management teams are far more likely to establish the day-to-day operational procedures that lead to success. They have that rare perspective gained by experience to identify changing market trends and know what to do to address them and still gain market share. With a strong management team, even prior credit issues are less of an issue during the funding process.

If you have a well-planned project, credit worthy customers, sensible contracts and a willingness to cooperate, then you can find a lender or investor that will be privileged to help and finance you in growing your business. If one lender or investor won’t do it, another one will. You just have to provide them with a well conceived, compelling proposition

What we’re talking about here goes right back to good, comprehensive documentation. If you’re not sure what that documentation should be or how to say it, feel free to ask for help. Remember, the only bad question is the question never asked.

Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-370-4871! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com

Peeling Back the Curtain of a Typical Funding Process

Want to know what happens when you your loan application or request is received? In most cases, it will go something like this…..

The first look

In most cases, your lender wants to make an initial determination of interest and fit in a matter of a few minutes after receiving a business plan or formal request for investment. So, be sure to provide a compelling description of how your plans for the loan or investment proceeds are safe and profitable.

If they do decide to move forward, the review process moves at a deliberate pace from there. But if your company is too early stage or your opportunity doesn’t quite suit them today for other reasons, don’t stop here. I assure you, there are other lenders that may be a better match for your individual situation.

A longer conversation

Those companies that do meet with the lenders financing or investment criteria move on to the next step in the process. Often that’s a meeting or conversation with the management team. The lender’s goal in this meeting is to learn more and evaluate the company’s management team, business model and market prospects. They will want to see if there is a good overall fit between their operating philosophy and yours. If there is a mutual interest in proceeding further, additional conversations or meetings will typically follow.

The conversations and meeting will include additional research and analysis of the business with the goal of better understanding the company’s long-term potential for success and how they might contribute to that success. You should be prepared to discuss your products and services, your market’s dynamics and competition as well as your market positioning and what individual attributes will spell success for you. You should have already developed and shared some comprehensive financial models to help bring the range of your upside potential into sharper focus.

Virtually all of our applicants and development partners find every lender’s due diligence process to be overly thorough and too time-consuming. In a typical scenario, the entire financing process from first meeting to funding can range anywhere from 45 days to several months, depending in part on how long it takes to negotiate a term sheet and provide any additional documentation required. The time from signing a term sheet to closing an investment typically ranges from 45 to 90 days, depending in part on how well the lender or investor knows the business and borrower at the start of due diligence but also how quickly you can facilitate their due diligence process.

You probably won’t like it, but the truth of the matter is, lenders and investors rarely communicate actively and openly through the entire investment process. Many find that this approach facilitates a natural timing to a successful close that fits the particulars of the investment. So, don’t hesitate to call them every couple of weeks if you haven’t heard from them or made other arrangements.

If you need help, ask for it. Visit us tomorrow for another free commercial loan secret and be sure to subscribe to our RSS feed.

You can also contact us to ask questions and voice your concerns. Just pick up the phone and dial, CFIC Funding, Inc. today at 310-421-7370! Ask for David Young or Wayne Clinton. You can also visit http://www.cficfunding.com or mail david@cficfunding.com or wayne@cficfunding.com