Mythbusting How to Get Funding
It’s not always easy to start-up or continue to grow your business. Sometimes it takes great fortitude to keep going especially during a time of uncertainty. The financial challenges associated with COVID certainly hasn’t helped. What can a business owner do to get back on solid financial footing and continue to build their business and follow their passion? This week on our live we hosted Alexander Bertok from BDC to discuss the common myths and challenges businesses may face when seeking funding.
What is BDC and how do they help Business Owners access funding or applying for a loan?
Recognize that applying for a loan to grow your business is not a bad thing. Consult your accountant, lawyer and team of professionals to get perspective on what the needs of your business are and how you can make the most of the funds you are applying for. BDC has an advisory team who can help you as well. Bottom line: Consider leveraging OPM- other people’s money to build your business. Keep in mind when you borrow it’s a tax deduction to borrow to invest in your business and use that money to build your business can be a game changer for the business. The key is not waiting the last minute to get the funding your business may desperately need.
Why is it important to not wait to get the funding you need?
Cash is king. The truth is when you are in good financial shape it probably seems like the worst time to apply for funding- you don’t need it. But that is precisely the point. When you look good on paper to the bank you have more certainty that the funds will be available when you need it. Ask yourself how can not having the funding when you need it impact your business? Will it hold up making payroll, or being able to take on a larger client? What we have learned during COVID is that even if your business is doing well now, sometimes circumstances can change much sooner than expected. Having access to the loan or line or credit at that time means your business has been vetted by the bank at the best possible time instead of at the worst possible time in your business. Asking for financial support for your business is like applying for insurance, you are less likely to get it if you really need it.
What are the pro’s and cons of working with BDC versus working with another bank?
BDC tends to more small business owner friendly and more likely to work with you to get the loan or funding you need. They will also work with other banks and collaborate with other banks to compliment a loan you may get elsewhere. Even more important, BDC will also offer advice on what you may need to do to get the funding you need and help you think about what you may need to do next to put your business on the right footing. This service is offered through advisory service channel as well as providing free resources on website. The goal of BDC resources is guide entrepreneurs to build their confidence as they navigate their business-especially during the pandemic.
Know your numbers
At the end of the day, applying for funding means you need to have a good sense of your business’s financial health. If you are a business owner who still doesn’t really understand what is going on in your business- NOW is the TIME! Seek out the services of a tax advisor, or a fractional CFO who can run the numbers of your business with you and helping you to understand the financial statements associated with your business. If you don’t feel you are currently getting the information you need from your current advisor now is the time to get a referral to someone who can help you to have a better relationship with the numbers in your business. Seek out a tax advisor in your business instead of a tax filer. If you are not sure how to identify a good tax advisor reach out to our team and we will send you a resource entitled how to identify the difference between an advisor and a tax filer.
What are some misconceptions around funding during COVID?
If you are applying for COVID loans and you don’t need them this may have unintended consequences for the business. You may risk be seen as a higher risk when applying for loans during the future and you may also open yourself up to an audit in the future. On the flip side, if you are a service-based business who may not want to apply for a COVID loan as you are not expecting to need funding, waiting to apply for funding you may need later may hold up the process to the detriment of your business. As you cannot always predict what the future holds creating as much financial certainty in your business as possible is crucial.
Cultivate a community of like-minded business professionals
Running a business can be tough and it great to have support from a like minded group of entrepreneurs who understand the struggles and victories of entrepreneurship. Cultivate a community of entrepreneurs you can lean on, and share information about best practices. For a complimentary assessment on how you can build your business’s financial IQ or references to our team of professional tax advisors, reach out to our team at firstname.lastname@example.org