The 7 Biggest Business Finance Pitfalls And How To Avoid Them So You Can Grow Exponentially

There are seven major pitfalls when it comes to financing extraordinary business growth. Falling into any one of them will short-circuit your dream of tenfold business expansion. The mistakes ordinary business people make are:

1.Looking for a line of credit at the wrong time. The wrong time for a bank is when they don’t have the money to lend because they have gone beyond, or are near their credit limit. Always know what a banks credit limit is. Towards the end of the fiscal year is a good time to try for capitalization. If banks haven’t made their quota of lending they will be hungry for your deal.

2.Not setting up the bank, vis-à-vis your interviewing process. Yes you are interviewing the bank and not the other way around. If you go to them “cap in hand” you will be just one in a crowd. You must get an introduction from someone that knows the bank. A CPA is ideal. Only interview someone with the power to do a deal on the spot.

3.Not leveraging banks off against one another. Most people apply to just one finance source and give up when refused. You must get as many offers as you can. This involves doing as many interviews as possible, then forcing competition between the various lenders. Be aware that they WANT to lend money because it is how they make their money.

4.Not rotating your loans. Cash flow is not static. It is the lifeblood of all business. It has to keep moving and for growth to happen it has to have an abundant wellspring. The entrepreneur’s role, if extraordinary growth is to be achieved is to provide that cash flow that does not hold growth back. Of necessity this means constantly reviewing and adjusting loans to open the tap more with better-leveraged deals.

5.Not having anything other than a deposit relationship. The ordinary businesspersons idea of the bank as a financial institution, vis-à-vis individual and corporation relationship, has to fundamentally change.

6.Not having lines of credit. One source of capital is never enough. Who knows what opportunities will be just around the corner. A source of money constantly available to tap into is a must for the business that is serious about extraordinary growth.

7.Not requiring the banks to service you the way the banks are supposed to. Banks do not know your business. If they begin to get too hands on with you, move to another. If they begin to restrict your agreed credit for their own internal reasons, move to another. Build rapport with all sources of cash and be sure to maintain those relationships constantly.

Your mindset with regard to lenders has to change completely; otherwise you aren’t going to be successful at growing your business extraordinarily. Constantly searching and asking for credit does not hurt your credit rating. Only failing to keep up repayments will do that. But because your business is growing extraordinarily, because you are making sure the lifeblood cash flow never dries up you will never hurt your credit rating.

You must make at least five to seven presentations to financial institutions a week before you really understand what the procedure is. Until you go out and make a half a dozen financial presentations, you aren’t going to know what you’re doing. Your mindset needs to be that of a winning provider not a beggar.