BCR Advisory articles
BCR Advisory Articles

Five tips to secure finance for your business

Five tips to secure finance for your business
In today’s tough economic climate, where cash flow is critical, small business owners may consider applying for new finance or refinancing their existing facilities. If successful, the process can result in access to extra funds, lower interest rates and reduced costs – all of which can be the difference between business survival or failure.

Approaching a bank for business finance can be a daunting proposition. Paul Hector of Bentleys Finance SA, with significant experience in commercial banking and specialised finance, provides his top five tips to give small to medium-sized enterprises the best chances for success:

1. Know your business intimately, from the names of your largest and smallest clients and competitors, to specifics on your gross profit, debtor management, creditor terms and anything else that differentiates your business from the rest.

2. Come prepared with:

  • your funding request, clearly highlighting your objectives, how much funding you require and for how long, and the security you wish to offer
  • current financial data
  • MYOB/Xero management accounts
  • aged debtor and creditor listings
  • the financial benefit from receiving the loan, and
  • a 12-month cash flow and/or profit and loss budget (spreadsheet format is fine), to help quantify the request.

Have a clear strategy. Know what your current, short and medium term strategies are for your business. Your strategy may involve expansion, downsizing, improving margins or simply maintaining your current position.

4. Prepare a SWOT analysis detailing your business’s strengths, weaknesses, opportunities and threats. This demonstrates that you know and understand where your business is heading in the context of competition and other market forces.

5. Shop around if you feel that the loan’s interest rates, security or structure are not ideal. All banks have different policies. In the current environment, banks are targeting businesses that can provide income not just from the loan’s interest, but from multiple sources, including EFTPOS, transactional bank accounts, personal credit cards and home loans.

For more information on finance strategy or on corporate recovery or insolvency strategy, contact BCR Advisory here.

Disclaimer: Please note that the information provided in this article is of a general nature and does not constitute financial advice. The facts of every situation differ and should be discussed with a qualified advisor if advice is required.

Stephen James
Stephen James is the director of our Adelaide office. Stephen has over 17 years of corporate reconstruction and insolvency experience. He is involved in a wide range of insolvency trading engagements and complex insolvency litigation cases that have been successfully resolved.Stephen specialise in insolvency issues affecting the SME market.You can connect with Stephen via LinkedIn as Stephen James, BCR Advisory (SA).