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Article Check - Financing Success
It’s just as easy to succeed as to fail in direct mail, so here are a few simple guidelines of what not to do. You’ll probably still find lots of other mistakes to make on your own — but at least you won’t have to make these:1. Not knowing your audience - every ad should be to a specific targeted group that you research until you know it intimately. Aim for your readers' personal hot spots, in a writing style and level they're comfortable with. Learn how they feel and act, and what they like and dislike. Then, craft your style and content specifically to your readership.2. Mailing to the wrong list - this is probably the most common, and most fatal, error made in mailings. Spend as much time on researchin
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business stra
Integrity is one thing that stands strong when everything else falls apart. What goes around comes around. So many of us could have been successful today if we had been honest with ourselves. As an internet marketer sometimes I am tempted to over exaggerate in order to make quick sales but I have come to discover that most successful people online succeeded on the ground of integrity. Indolent people cannot survive in commerce scenario of today, it imperative that as a business person, one should be diligent and FOCUSED in achieving maximum success. Say it as it is. Be sincere in your business dealings because it pays in the long run.You see in this life there are forces and principles that control our very
A 'No' can provide a valuable learning experience, one that can lead to an eventual 'Yes'. There will be many a 'No' in your business life so get used to it ; continue to be the optimist (a requirement for any successful entrepreneur) you always were.
How to handle a 'No'.
Start off by not getting mad, defensive, or hurt. Make sure you do not get angry as you may have to deal with this lender in the future!
Do ask, politely, why your funding request was turned down: this is your chance to learn.
Hopefully they will give you specific reasons. Take notes and ask reasonable follow up questions i.e. make the most of this 'training'.
Listen very carefully and you might discover that the lender's concerns can be overcome. You may have the opportunity to adjust your proposal and get your funding.
It may be a big and resounding 'No', one without or with an insufficient explanation such as 'We are presently restricting our loans to certain sectors.'
A "No' without explanation can mean that there are fundamental problems with your business and/or the proposal. An unqualified 'No' will require you to analyze your proposal with a critical eye and may even require you to have an independent party review your proposal.
Here are some common issues that a banker or investor may or may not express to you.
Not enough owner equity.
This issue is unlikely to be 'hidden' and most lenders will point out that you do not have enough equity at stake. Why should they take the majority of the risk? Why are you not willing to invest more of your own cash and/or attach valuable property/assets to secure the loan?
There are many good reasons not to attach personal assets to secure funding especially jointly owned assets such as a home. Do not rush into placing your personal assets, especially your home, at risk. The lender will take your home if the loan defaults and the stress of such a seizure can ripe apart your family!
That said it is not unreasonable for a lender to request more than 'sweat equity' from you. If you are not willing to place a significant investment in your own business then why should any lender?
The business is not yet profitable.
Why would a bank or lender be interested in a business that is not producing a profit?
Why are you in a business that is not profitable?
There is a significant difference between not being profitable and not being able to meet operational and inventory expenses! Profit is the difference between the total revenue of a business and the total of all the business' expenses.
Industry specific averages do exist and bankers and investors will refer to them when they do their due diligence. There are many sources where industry information can be obtained the most recognized being Dun and Bradstreet.
Smaller businesses may not show a profit because the owner takes any surplus as personal income or they purchase business assets: surplus revenue turns into a operational expense.
The lender has every reason to be concerned about a businesses' profitability. They do want you to be profitable and they need to hear how funding will increase your profitability: make sure you do so in your funding proposal.
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business stra
Fashion jewellery is an essential part to augment one’s personality. Not only clothes that a woman wears add up to her personality but the matching accessories sum up a distinct aura. Fashion jewelry comes into many line and styles. The approach of jewelry is to enhance a woman’s outlook by giving her different look altogether. Different occasions, situations and places are symbolized with different type of jewelry. It doesn’t matter how much jewelry she wears before buying any other. If it is in fashion, it goes in with the other fashion accessories.Fashion Jewellery through online selling comes into different varieties such as beaded, silver jewellery, gold and diamond jewellery. Its very well said that d
It may be a big and resounding 'No', one without or with an insufficient explanation such as 'We are presently restricting our loans to certain sectors.'
A "No' without explanation can mean that there are fundamental problems with your business and/or the proposal. An unqualified 'No' will require you to analyze your proposal with a critical eye and may even require you to have an independent party review your proposal.
Here are some common issues that a banker or investor may or may not express to you.
Not enough owner equity.
This issue is unlikely to be 'hidden' and most lenders will point out that you do not have enough equity at stake. Why should they take the majority of the risk? Why are you not willing to invest more of your own cash and/or attach valuable property/assets to secure the loan?
There are many good reasons not to attach personal assets to secure funding especially jointly owned assets such as a home. Do not rush into placing your personal assets, especially your home, at risk. The lender will take your home if the loan defaults and the stress of such a seizure can ripe apart your family!
That said it is not unreasonable for a lender to request more than 'sweat equity' from you. If you are not willing to place a significant investment in your own business then why should any lender?
The business is not yet profitable.
Why would a bank or lender be interested in a business that is not producing a profit?
Why are you in a business that is not profitable?
There is a significant difference between not being profitable and not being able to meet operational and inventory expenses! Profit is the difference between the total revenue of a business and the total of all the business' expenses.
Industry specific averages do exist and bankers and investors will refer to them when they do their due diligence. There are many sources where industry information can be obtained the most recognized being Dun and Bradstreet.
Smaller businesses may not show a profit because the owner takes any surplus as personal income or they purchase business assets: surplus revenue turns into a operational expense.
The lender has every reason to be concerned about a businesses' profitability. They do want you to be profitable and they need to hear how funding will increase your profitability: make sure you do so in your funding proposal.
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business stra
As you may already have ascertained, it is our view that current, conventional advertising has been beset with problems from the very beginnings. Probably the principal problem advertising has is …accountability. Or rather the lack of it!As we have said before, the real differences that exist between competing products is frequently perceived as no longer significant.The result is that it is not self evident just what an advertiser has to sell that is so different and worthy of consideration.Therefore, if no significant point of difference is apparent, why is that product more deserving of the customer’s money than any other?It was partially because of this that we have seen a dramatic rise
There are many good reasons not to attach personal assets to secure funding especially jointly owned assets such as a home. Do not rush into placing your personal assets, especially your home, at risk. The lender will take your home if the loan defaults and the stress of such a seizure can ripe apart your family!
That said it is not unreasonable for a lender to request more than 'sweat equity' from you. If you are not willing to place a significant investment in your own business then why should any lender?
The business is not yet profitable.
Why would a bank or lender be interested in a business that is not producing a profit?
Why are you in a business that is not profitable?
There is a significant difference between not being profitable and not being able to meet operational and inventory expenses! Profit is the difference between the total revenue of a business and the total of all the business' expenses.
Industry specific averages do exist and bankers and investors will refer to them when they do their due diligence. There are many sources where industry information can be obtained the most recognized being Dun and Bradstreet.
Smaller businesses may not show a profit because the owner takes any surplus as personal income or they purchase business assets: surplus revenue turns into a operational expense.
The lender has every reason to be concerned about a businesses' profitability. They do want you to be profitable and they need to hear how funding will increase your profitability: make sure you do so in your funding proposal.
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business stra
How long will your office space be filled with noise, dust, confusion and distractions? No matter how long it is too long.You can escape all the remodeling hassles by renting commercial office space for a week, month or however long you need it. And often the expense is more than justified by keeping your business productivity high.Commercial office space doesn’t refer to retail facilities. It is a concept originally developed to answer the need for temporary office space. It makes moving from a remodeling war zone simple and easy. Here are just a few of the reasons why commercial office space is a convenient way to escape remodeling distractions. There is no long-term lease in
Industry specific averages do exist and bankers and investors will refer to them when they do their due diligence. There are many sources where industry information can be obtained the most recognized being Dun and Bradstreet.
Smaller businesses may not show a profit because the owner takes any surplus as personal income or they purchase business assets: surplus revenue turns into a operational expense.
The lender has every reason to be concerned about a businesses' profitability. They do want you to be profitable and they need to hear how funding will increase your profitability: make sure you do so in your funding proposal.
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business stra
If you decide you’d like to reduce your tax burden, protect your assets, simplify your company operations or enter into cross border business transactions for example, and you’re interested in whether an offshore company structure could help with any or all of the above, chances are it could.There are many ways you can use an offshore company, many benefits you can derive from the use of one and many locations in which you can set one up…so how can you decide whether such a structure is applicable to you and how on earth should you decide where to incorporate an offshore company?What to Use an Offshore Company ForYou can use an offshore company if you want to trade internationally or invest
Asking for too much money.
Lenders want their ratios to be maintained especially the percentage of the collateral in relation the equity base of the business.
You may be able to get around this one with a little song-and-dance routine i.e. some restructuring of the proposal. Keep in mind that different lenders have different comfort zones; do not be anxious to lower the amount you really do need.
The business is too risky.
Lenders do have a 'no fund' list, businesses that they feel are too risky or objectionable.
This is difficult to overcome and usually requires you to try another lender, one who understands your industry and can evaluate the risks more objectively.
The business strategy is not valid.
How would a lender know if your business strategy is sound?
Experienced bankers and investors, especially those familiar with your industry, do have good 'intuition' and should be listened to. Inexperienced bankers and investors have many preconceived notions that really do not stand up to 'daylight'. The problem is to determine which category that your banker falls into.
If the former you should be willing to apply some 'brakes' to your business proposal and seek clarification before your proceed.
If the later just move along to the next institution.
Inadequate collateral.
Each lender will have their minimum requirements for collateral. Valuation of the collateral is based on what the lenders can achieve in a distress sale. While this type of valuation is highly annoying it is understandable: bankers 'sell' money and leave non-capital assets to a liquidator to sell.
You may be able to deal with this type of rejection by increasing the collateral available to the lender. Better still find a lender who understands your industry as they might be more objective about your business assets true market value.
Closing points.
Shop around and do not settle for the first offer.
Repeated failure to obtain funding clearly points to significant flaws in your proposal or business. Sometimes the only true solution is to cease operations before you get deeper into debt and waste more of your valuable time in a floundering business.
Alex G. Landels
Copyright 2001
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