How to Get Business Financing Before You Need It
February 26, 2010
Access to credit was the last thing on my mind when I started my business.
In 1990, I was well capitalized, and no one in my circle of friends advised me about applying for credit as part of my business safety net.
However, as I began building my business network, associates helped me understand how valuable other people’s money would be to continue my firm’s longevity. Their advice has proven favorable.
Let me share three financing methods to keep you afloat or help invest in necessities that serve you in the long run.
1. Apply for a business line of credit.
Information about banking products often occurs during extended conversations, so I encourage you to speak with a representative at your local bank branch.
My bank’s rep convinced me to apply for a business line of credit after reviewing my accounts. There was no application or yearly fee, and if money was needed for capital expenditures, I could simply write a check to cover the cost, paying the principle and low percentage back over time.
I took her advice and now access the funds as needed. Financial institutions are more willing to set up these terms for account holders seemingly when you don’t need the money right away.
Talk to your bank’s rep to learn what’s required to open a line of credit, the current rate, and the highest amount you can secure. Set it up now so that funds are in place when an opportunity arrives.
2. Open a credit union checking account.
Why stop at establishing a bank relationship when credit unions also provide alternative methods to fund growth and expansion?
Most credit unions maintain a Web site presence, so unless you’ve already opened an account, visit local institutions online before visiting in person to learn what’s available.
I opened a business checking account years ago with my local branch, which provided me with many no-fee services that were fee based at my bank. That leverage kept money in my pocket, and each year I meet with a service representative to learn about new business instruments.
No longer do I enter my credit union to only make deposits and withdrawals. My visit also includes eye contact and a quick greeting with representatives I know in order to strengthen my access to credit union cash.
3. Learn what’s new through your accountant or financial planner.
Who’s more knowledgeable about finances than people who work in that arena every day? I count on my finance gurus to keep me apprised about investments and money-borrowing opportunities that I wouldn’t learn about through other sources.
For example, my financial planner advises me about setting up and funding my retirement account, and she also helped me to secure a lower-cost mortgage by asking about my present circumstances.
Her assistance helped me realize the value of her industry reach along with its benefits. If I need help with business funding sources or want to refer a friend, my planner is one person I can depend on, and the same is true for my accountant.
Put locating business financing months or years before you need it in the “think big” category. It’s a foundation that strengthens your business when least expected.
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