5 Simple Questions About Connecticut SBA Financing
The financing strategy that a business selects plays a major role in their overall level of success. This is especially true for Connecticut business that will need some form of SBA financing. Every business needs to select a funding strategy that allows them to reach their objectives.
When a business owner is struggling to figure out the Connecticut SBA financing plan that works best for their needs, the following questions need to be asked. This keeps us from potentially making a wrongful decision that cripples a business’ ability to grow over both the short term and the long haul.
1) Is The Business Plan Detailed?
A Connecticut business owner who is in search of the proper SBA financing will need to have a detailed plan for their business first. Those who seek financing before they have put together a detailed business plan are putting the cart before the horse in a very detrimental way. We have to crawl before we can walk and this is a very crucial step to remember.
2) What Is Our Personal Credit Rating?
Obtaining business financing is one of the primary concerns that we will have and in order to find out more about the Connecticut SBA financing options that are available to us, we need to know as much as possible about our personal credit rating. The credit score that a business has is a major reflection on their ability to handle money. If the business has a low credit score, this adversely affects their chances of receiving favorable financing terms.
3) Are There Any Outstanding Invoices?
If the business is unable to resolve all of their unpaid invoices (or at least the vast majority of them), this is a red flag that most financiers are not going to be willing to ignore. Unless the clients are all paying their invoices in full, no reputable financier is going to provide assistance. A company that cannot collect money in a timely fashion is not a company that is going to be trusted with any additional finances.
4) What About Collateral?
Personal collateral and business collateral can both be used to secure Connecticut SBA financing. Since loans have a chance of going into default, a financial institution has to make sure that they are able to receive the necessary compensation even if a business falls on hard times. While there are some lenders who are willing to provide a loan without collateral, they tend to be few and far between.
5) Does The Company Have The Proper Cash Flow?
The small business that has the strongest cash flow is the business that will have the most financing options made available to them. A small business owner will have to prove that their cash flow is strong enough to sustain over the long haul and if they cannot, their ability to secure financing is definitely going to be compromised. The business needs to have the proper margins and display potential for future growth before any sort of reputable financing package is provided.
Connecticut SBA Financing
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