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Advice from CPAs

Securing Your Business Financing. Advice from CPAs. Bank loans are the most common source of financial support Explore alternative funding options Your CPA can help!. Lending 101. Debt Financing Most straightforward Interest payments and repayments due within a specific time

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Advice from CPAs

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  1. Securing Your Business Financing Advice from CPAs

  2. Bank loans are the most common source of financial support Explore alternative funding options Your CPA can help! Lending 101

  3. Debt Financing Most straightforward Interest payments and repayments due within a specific time A standard bank loan Types of Financing

  4. Equity Financing Raise capital by selling interest to investors No guaranteed return Investors share in company’s wealth May also insist on sharing management and control Types of Financing

  5. Which financing option is best for you? Ask yourself: Do you want total control of your business? Do you want to leave a legacy? Eventually, do you want to sell your business? Financing Options

  6. Financial Institutions include: Commercial banks – focus on the needs of small businesses Community banks – accommodate both individual and commercial customers Credit Unions – support vision of their members Key Sources of Funding

  7. Customer or Supplier Provides discounts for up-front payments Generates cash for your business Factoring or Accounts Receivable Immediate funding Factoring agreement can be complicated Key Sources of Funding

  8. Working Capital Similar to a line of credit Tied to company’s receivables Economic Development Groups Offered through federal, state and local governments Friends and Family Treat it as a business contract Create a written agreement to avoid misunderstandings Key Sources of Funding

  9. Initial Public Offering (IPO) Common route for selling stock Private Placement Less complex because investors are pre-selected Private Investors “Angels” take an equity stake in your company A Brief Overview of Equity Financing

  10. Your company MUST be seen as a good risk: Be prepared Have a business plan Your CPA can help you identify your goals Two Rules of Thumb

  11. Why do you need financing? Apply for capital with a specific purpose Is it urgent, short-term or long-term and how much do you need? Be specific and detailed Questions and Answers

  12. Do I have a realistic plan to generate funds to repay debt? Present it as a recoverable risk How strong is your management team and support staff? Identify your strengths and weaknesses in advance Questions and Answers

  13. Executive summary Explanation and operation of business Description and qualifications of management Financial data Miscellaneous attachments for details An Effective Business Plan

  14. ALWAYS be honest about your financial situation Be prepared to discuss any business problems you encountered in the past Offer preventative measures Your candor counts Work closely with a CPA A Few More Tips

  15. Define your goals Prepare your business for scrutiny Demonstrate your company is a good risk Prepare for questions and answers Consult with your CPA to determine which options are best for you Review

  16. Thank you and good luck!

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