Updated: May 12
Global Financial Training Program has been teaching finance professionals how to solve the needs of small, rapidly growing businesses for 30 plus years. Let’s look at a typical scenario.
You are a business owner, your business has been slowly growing for the last two years and you have all your tools, marketing and systems in place to charge forward and realize incredible growth. Now you need the capital to do so. You hear a lot of statistics about new business failures in the first 18 months. What you don’t read much about is how business owners jumped the hurdle of having adequate capital to seize opportunity during this critical stage. Global Financial Training Program teaches its students dozens of solutions to this problem.
Let’s look at the biggest myth surrounding working capital and ability to fund your growth.
Interest versus Opportunity-Business loans and the Global Financial Training Program
The mistake 90% of the business people make is equating negotiating the lowest interest they can find with wisdom. Could not be more wrong. You must keep your eye on the “opportunity ball”.
Take a look at this scenario. Here’s a typical type of scenario that Global Commercial Training Program explains to its students. A contractor has an opportunity to take on 4 new contracts averaging $48,000 a year over the life of the 3 year contracts. That’s close to $600,000+ growth. He needs 2 additional pieces of heavy equipment and two operators to fulfill his need at a total cost of $350K. So he goes to a bank. They say no. He goes to private lenders who are, in his opinion too expensive. He continues to look. Meanwhile the opportunity goes to his competitor.
If he went to a commercial loan broker, negotiated a fair fee, the equipment interest would have cost him under $50K but the total profit on that incremental growth would have exceeded $200K. He’d have the business, the profit, the referrals from the happy clients and the paid-off equipment.
So what are 5 ways to finance rapid business growth?
Always check a commercial loan broker after your bank says “no” and weigh the cost against the opportunity.
If your firm has been in business for a few years discuss asset based loans where what you already own helps finance future growth. These loans are available for as much as $30,000,000.
Do a search on short term business loans. These loans typically range over a 3-5 year period.
Contract financing: You can take the contracts you have and use them to collateralize your growth.
Equipment leasing. You simply use the equipment you are acquiring as an asset to secure the loan. Oftentimes the full value of the equipment is covered. This is one of the most frequently used loan instruments.
The fact is there are over 30 different types of loans a commercial loan broker has at his fingertips. So really the best piece of advice is #1. If the bank turns you down don’t start shopping more banks. Get over to a commercial loan broker ASAP.
Here are some resources:
Lending to churches and religious organizations Http://www.GlobalChurchFinancing.com
Lending to small businesses Http://www.globaleasing.com