Are you thinking about borrowing money for your small business? Here's some helpful tips to make your trip to the bank easier!
Every business owner faces this day - when they need to borrow money. Some are prepared well in advance. Their records are in order, their bank is familiar with their operations and both sales and earnings are good. All the world's secure, the owner need merely ask and cash comes pouring into their account like a slot machine that hits all three bars. Clang, clang, clang goes the coins, just spilling out for all to see!
Not all business owners have that kind of luck. In fact, most of us just scowl to ourselves when we hear the other fellow's machine paying off and while we hunch down over our own machine, shoving fists full of quarters into the slot and getting nothing in return.
As I live in Arizona, we have lots of casinos here, not that I frequent them often. But I have been known to hunker down over a machine now and then and no, I never got all three bars either!
But this article isn't about Indian gaming, it's about business and what you need to do to get ready - before you go to the bank!
Most small business owners are guilty of this; receipts get stuffed into files, those files get stuffed into file cabinets and once a year they're emptied and they take the files to their accountant, usually around tax time. Then he scowls and hunkers down to sift through all those records trying to do what you asked; hold down taxes. Sound familiar?
You probably lease your wheels through the company and be honest, not all of those expense receipts were really attributable to the company were they? But hey, you wrote it off! Congratulations! Well, only until you find you need to borrow money. Now what are you going to do? Instead of showing income you buried it to save taxes and you expect your bank to lend you the money you need. Now it's your turn to scowl as your banker looks at you and says, "I'm sorry, but your business just doesn't show enough income."
This happens a lot and while saving on taxes is a good thing, at the expense of your business credit, it's not worth it in the long run.
So if your going to expand and you know sooner or later you'll have to make that long walk up to your banker's desk, hoping you'll pull three bars and hear that clang, clang of the coins, you better be prepared and plan for it. Or what you'll get is two lemons and bell - and that's not winning!
About the Author
With over 35 years of experience, Eric Stevenson is considered one of the leading management analysts in the United States. He founded the prestigious corporate development firm, Axiom Capital Corporation, the only firm in the United States recognized by Standard & Poor's. As an accomplished management analyst, he has been quoted in the Wall Street Journal, Dow Jones, CFO Magazine, VAR Business, E-Company, Computerworld and U.S. Technology. Eric now enjoys life as a freelance writer and weekly columnist for Axcess Business News online. He can be reached by email at: editor775@charter.net