Improve your company’s financing prospects

Here are five ways you can help to boost your chances of landing the financing you need as a small or medium-sized company with big ambitions.

Aim for realistic targets

However large and profitable your company might eventually become, when it comes to finance applications, it is important to be realistic and to focus on where you are rather than where you hope to be.

From the point of view of lenders and potential funders, overestimations of future revenues and income streams are easily spotted and not nearly as impressive as many SMBs think they should be. It is generally much better in these contexts to present clear strategies based on realistic development paths and growth potential rather than fanciful figures that bear little relation to reality.

Be honest

As well as being realistic about their prospects, SMB bosses should also be honest with potential lenders or funders they’re in contact with.

There is an understandable temptation to only present part of the picture when it comes to your company’s finances but it is much better to be upfront and to tell the whole story as clearly as possible.

Any kind of financial service provider you’re in contact with will not expect an SMB’s development to have been entirely smooth sailing and they won’t necessarily be deterred by evidence of difficulties at different stages. What they will be looking to assess is the progress your company has made and its potential going forward. To get to that point, an approach based on transparency and honesty is appreciated and expedient all round.

Investigate all options

There are an increasingly broad variety of financing solutions available to SMBs around the world, with new online platforms helping to bring businesses into contact with more and more specialist service providers. As a result, there is good reason for companies in any field and any financial position to be confident of finding a financing package that meets their needs.

It is important though to look beyond mainstream funding bodies and traditional lenders and to take the time to understand how certain services could be useful in your specific situation. Whether you need financial flexibility on an urgent basis or you’re aiming to secure cash for future investments, there are more ways than ever to find the kind of deals that could help.

Get help where you can find it

Clearly, entering into financing arrangements of any sort is a significant step for a company of any size and the associated decisions should never be taken lightly. So it can be important and prudent to seek out advice from third parties with expert knowledge in the field, particularly in light of the expanding array of financing solutions that are now widely available.

Even if only to support your understanding or to provide some reassurance, it can be well worth seeking out guidance from impartial experts if you’re tackling the process of finding fresh finance as an SMB boss.

Stick at it

As with so much else in life, finding the right financing as a small or medium-sized business can require a good deal of persistence. In fact, it is very often imperative for SMB leaders not to become impatient or to lose confidence too easily in pursuit of the right kind of financing. It could be that the process is straightforward and quickly resolved but it could also take time, effort and determination on the part of the people taking the lead.

Whatever stage of development your company is at and whatever you’re ambitions for its future, there is every reason to be positive about the prospects of securing the finance you need, particularly if you’re able to keep the five focus points above in mind along the way.

Keith Tully is a leading business insolvency expert and a partner at the Begbies Traynor Group, the UK’s largest professional services consultancy. Keith provides support and advice to small and large companies alike with the benefit of over 20 years’ experience in the field.