HOW TO REDUCE BUSINESS DEBT – A PRACTICAL ACTION PLAN

Posted on June 10, 2013 by andrew.gregson

Business debt can be a good thing. It can help you to establish your business, fund growth or invest for the future. However, if the level of borrowing becomes excessive it can lead to many problems, such as:

Servicing the debt drains away all the cash
no free cash to deal with unexpected costs
debt unbalances the balance sheet reducing the value the business
no cash to take advantage of opportunities
Reduced service/product quality

Crushed by Debt everyday?

This article gives a framework and various practical ideas to help you reduce your business debt.

A framework for recovery

There are six basic strategies that can help a business get out of excessive debt:

Sell assets
Increase income
Restructure liabilities
Reduce costs
Raise more capital from investors or partners
Exit the business

The following examples in each area are not exhaustive, but may give the business owner some practical ideas.

1. Sell Assets

Your business may be able to conduct business normally without that extra forklift or truck. You may have a mortgage on your building and selling the building will reduce the debt and cash flow requirements.

2. Increase Your Income

There are various ways of increasing the amount of money flowing into your business, such as:

Increase sales
eg: through increased marketing, cross-selling to existing customers, offering special deals to get additional or advance orders, getting referrals with other organisations/affiliates
Raise your prices. This is easier than it sounds but if a price rise is not accompanied by a hard look at value pricing, then it will frighten existing customers.
Find alternative sources of income
eg: renting out unused office space, assessing your waste or unused products and seeing if it has any value., obtaining commissions from other organisations

3. Restructure liabilities

Your ‘liabilities’ are all the amounts of money that you owe to other people. Restructuring your liabilities doesn’t necessarily reduce the overall amount you owe, but it can give you more cash, more disposable income and/or reduce the amount of debt you need to provide working capital.

Examples of ways that you can restructure your liabilities to reduce your debt include:

Negotiate temporary longer or scheduled payment terms with suppliers
Replace existing loans with, for example:
- loans that have a lower interest rate
- guaranteed loans (guaranteed by shareholders) to reduce the interest rate
- repayments over a longer period of time
- consolidated loans
Defer tax liabilities (this requires specialist tax advice)

4. Reduce Costs

There are two principle ways to reduce costs:

looking for big savings, or
make small reductions across the board

To find big costs savings, concentrate on large savings first. Can you reduce rent by moving? Or cutting staff hours? To make savings across the board, set a savings target (say, 10%) and reduce each budget by that amount. Then take small steps to reduce costs, eg: reduce communication costs by going to prepaid cell phone cards or opting for cheaper equipment when purchasing, for example

5. Raise more capital

You can raise more capital by:

finding more investors, eg: venture capitalists
issuing more shares to current investors
obtaining grants

Also, take a look at your asset list and assess whether it can be converted into assets of greater value. For example, if you own land, can you build more offices or houses on that land?

6. Exit the business

To exit the business, options include:

Selling the business as a going concern
Going into receivership
Selling off all the business assets (including the business goodwill, eg: the client base) and using the proceeds to pay off the liabilities.

Andrew Gregson is a Senior Partner with Floodlight Business Solutions (www.floodlight.ca), a turnaround company that supplies specialist advice on rebuilding sales and reducing debt.

THE BAILIFFS ARE COMING! THE BAILIFFS ARE COMING!

Posted on May 22, 2013 by andrew.gregson

How to save a business in crisis!

We got a phone call from a manufacturing business on a Wednesday afternoon with the message – The bailiffs ARE COMING! By Monday afternoon, we had put court protection place. The court protection stopped the bailiffs in their tracks and bought the company 30 days in which to demonstrate to their creditors that the business was viable and could paul revere pay the somewhat overwhelming debt.

This business was viable, our analysis showed, because it had purchase orders in the pipeline. The orders had been delayed however due to circumstances beyond the company’s control. This familiar story had created the cash crunch and hence the crisis.

But the reality was that the company had narrowly avoided their creditor crisis for over a year by juggling the cash and making last minute payments. Now all the problems crystallised into one crisis. This was the perfect debt storm.

First we created a debt restructuring plan. To satisfy the courts, in 30 days the company must produce a credible plan to convince creditors that it can pay its bills in full or in part. The payment offered to creditors is based upon the ability to pay. But some creditors are fully secured with asset loans or leases. They expect to be paid as agreed or they can exercise their prerogative and repossess equipment. Canada Revenue Agency is a preferred and dangerous creditor especially with regard to payroll remittances. They demand to be paid within the first year no matter what the terms offered to other creditors.

The hardship really falls on the unsecured creditors. This usually means suppliers and can mean bank loans that are not personally guaranteed.

The company, through its intermediaries and the court, made an offer to the creditors based upon ability to pay. In this instance it was 100 cents on the dollar but paid over 36 months. And, oh yes, interest charges stopped. In many prior instances of this type of agreement with the creditors, the debt was negotiated down to levels that the company could tolerate. Many deals have been struck at 35 cents on the dollar.

But is this the right way to help a company? Faced with insurmountable debt, a company has no operating room, no credit and is in serious danger that any minor bump in the road will send it careening off the road. Just think of General Motors. And many companies have accumulated huge amounts of debt during this recession – loans from banks, loans from government, suppliers unpaid, Revenue Canada remittances, unpaid taxes. Far too many owners also borrowed heavily from their own resources (house and credit cards) to keep the company afloat.

So if the company get no help, it disappears, taking jobs and family assets with it.

But a bout of debt relief is not a solution for long term problems. Typically the company has seen falling sales and has lost the art of managing the company. In order to make this succeed, the marketing and sales have to be completely re-worked, pricing and costs have to be addressed, and most of all, the manager or owner needs a set of metrics in order to know when the business is on track.

If you can’t fix sales, a financial turnaround just doesn’t work. If you only fix the sales and marketing, the finances can pull down a very busy and otherwise profitable company.

Insider Tips to Saving Your Business in Canada

Posted on April 24, 2013 by andrew.gregson

Business debt worries!!! □ Are you worrying about where to find the money for the next payroll?

□ Considering filing for a business bankruptcy?

□ Afraid to answer the phone in case it’s a creditor?

□ Meeting soon with your unhappy banker to persuade him not to call your loan today

□ Searching the web for business turnaround, bankruptcy, receivership and insolvency information to help your company.

There are 3 vital factors that any person leading a failing company must consider. These are:

1. Stress And Worry May Keep You From Saving Your Company
2. Trustees, Lawyers and Accountants Don’t Have All The Answers
3. Innocent Mistakes Often Kill Troubled Companies

Factor #1: Stress and Worry May Stop You from Saving Your Company

Here are some common worries associated with a failing company:

You can’t pay the employees on time. What can you do about it?
Is bankruptcy the right answer? Will this save your company or kill it?
Should you pay your taxes? What happens when CRA or some other authority padlocks your door?
Can you make your loan payment? Should you ask your banker for help? Will you screw up talking to your banker causing the bank to foreclose?
You’ve made personal guarantees. What happens when the business fails? Will you be working the rest of life to pay these debts? Could they take your house?

Here’s the problem. Worrying is taking valuable time away from you… time that you should be using to save your company.

And it’s a vicious cycle. Because your worries are stopping you, your business declines further. And this causes even more worry and less action. You are the rabbit in the headlights.

Factor #2: Trustees, Lawyers and Accountants Don’t Have All the Answers

Trustees are experts at structuring settlements to the advantage of the creditors. But they have an accounting background and have no insight into how to salvage a falling business and return it to profitability.

Most lawyers have a passing acquaintance with the Bankruptcy and Insolvency Act. Unless they are working with the Act all the time, they are not aware of the changing politics of debt and what it takes to keep creditors happy.

Most accountants see burgeoning debt as a business killer and urge you to pay it down. They deal in ratios and cash flow but cannot help you rebuild a broken business.

Factor #3: Innocent Mistakes Often Kill Troubled Companies

Because you’re not an expert in business crisis management, you’re certain to make silly, but honest mistakes right now.

Do you know what to do when…

The bailiffs are at the door to seize your equipment?
The bank calls your loan?
You can’t make the rent payment?
The CRA padlocks your door?
Your biggest creditor threatens you for a payment but all the cash you have is for the payroll this week.
A creditor is asking you to make good on your personal guarantee?

The list could be much longer. You can just imagine all the problems for which you don’t have an answer. And when you decide wrong, you could be shutting your doors shortly and paying your creditors out of your own pocket.

Here’s How You Can Fix The Problems and Stop the Worries.

Call in a professional crisis manager. Why?

A turnaround specialist enters a company with a fresh eye, knowledge and skills and enjoys complete objectivity. The professional is able to spot problems and create new solutions that may not be visible even to company insiders simply because the latter are too close to the subject.

The turnaround manager has no political agenda or other obligations to colour the decision-making process, allowing him or her to take the unpopular yet necessary steps for survival.

Experience within a particular industry may mean little when a company is facing bankruptcy and a loss of revenue. A turnaround specialist brings experience in crisis situations. Like a paramedic, the talent lies in making critical decisions quickly in order for the patient to have the best chance at recovery.

Operating in the eye of the storm, the turnaround specialist must deal equitably with angry creditors, scared employees, and wary customers. With the highest stakes on the table, clearly this is no assignment for the faint-hearted.

When do you call in the professionals?

Most businesses can be salvaged, provided that the business idea is still intact and there are still customers willing to buy. It is not possible to turn around a buggy whip manufacturer, for example.

But the timing is important. Each day lost in not hiring the expertise translates into just two things – more cost and more pain.

Having a Business Turnaround Strategy can help you Build Your Business and create a more profitable company.

Article written by Andrew Gregson, Senior Partner at Floodlight Business Solutions LLP

agregson@floodlight.ca

MEDIA RELEASE

Posted on April 10, 2013 by andrew.gregson

Floodlight Business Solutions, a Business Turnaround Company, Launches

Kelowna, BC, A new type of business consulting company has just launched in Kelowna to help troubled medium sized businesses in BC and Alberta.

Floodlight Business Solutions Group LLP offers a unique turnaround service that is normally available only to companies with revenues in excess of $10 million per year.

Floodlight helps by focussing on two key facets of a company’s business problems – their finances and their sales.

“A company on life support needs a structured solution to its debt problems, it needs a strategy for pre-determined profitability and it needs to pay attention to its pricing,” says Floodlight Senior Partner, Andrew Gregson. “But these are unhelpful in the longer term if sales do not improve”.

So Floodlight also brings expertise to the table that establishes both an online and physical marketing presence to drive customers through the door.

The Floodlight business concept was created by a marketing genius who saw this opportunity. Don Robichaud was an exceptionally talented marketer with an instinctive feel for what would make any company’s sales jump, and had the ability to implement his solution. But he saw that his clients had too much debt, no profit strategy and no pricing strategy to complement the sales improvement. Enter Gregson, whose financial sweet spot is all three. Sadly, Don passed away in February this year, so Gregson, the other half of this yin and yang, is carrying the concept forward.

”Accomplishing a business turnaround is not for the faint of heart,” says Gregson. “It requires hard work and dedication on the part of the business owner”.

“With the help of professionals, however, the causes of the business problems can be identified quickly, and solutions can be created and then implemented”.

Why do businesses get into trouble? To quote former president Bill Clinton, ’It’s the economy, stupid!”.

Gregson believes that the recession has damaged many businesses in ways they could never have anticipated, while the length of the downturn has amplified business problems.

“In the first year, owners said to each other, ’next year will be back to normal’. As the gloom persisted, owners cut some costs and borrowed to make ends meet. But now, too many businesses have hollowed out their companies, carry too much debt and have cut into bone trying to get costs under control. And when the economy breathes again, they may be too far gone to revive”. How does the turnaround process work? Typical of any consulting work, establishing whether Floodlight can help at all takes one hour. Then the work of assessing the causes of the problems begins, followed by assembling a plan and then implementing the solutions.

How long does this take? A turnaround is typically a 90 day process of upfront “heavy lifting”, followed by 9 months of business coaching to keep the reforms on track.

Who can benefit? Floodlight specialises in providing support to manufacturers and service providers who have seen their sales crash and their debts soar.

For further information and media enquiries, please contact:

Andrew Gregson

Senior Partner

Floodlight Business Solutions Group LLP.

www.floodlight.ca

250-859-0752

AGregson@floodlight.ca

Dynamic Pricing – an Update

Posted on March 14, 2013 by andrew.gregson

DYNAMIC DRIVING COULD LEAD TO DYNAMIC PRICING

dynamic pricing hits the auto insurance industry

A couple of years ago I wrote an article on dynamic pricing based upon my own observations; an article I had read about beer pricing in Britain and some crystal ball gazing. My speculation was that the impact of cheaper and more powerful technology to gather terabytes of information on our buying habits would inevitably lead to tailor made pricing. CBC Radio liked it, interviewed me about my views and created a radio science fiction adaptation.

Well, my predictions are happening, and in the stuffiest business world imaginable – insurance.

Car insurance companies in America and Britain are dismantling their broad stroke underwriting criteria in favour of a much more customised approach. The push to do this, was a ruling in an EU court that bars insurers from discriminating upon the basis of gender.

Insurers are now gathering information from black boxes in cars and even from smart phones. They can, or will soon be able, to determine if you drive too fast in school zones, skid round corners or run red lights. Big Brother is truly watching you as you drive around town.

The information is then used to profile your driving habits and calculates a risk factor based upon the data and not upon assumptions that because you are a 30 year old mother then you are a better driver than an 18 year old testosterone driven male.

“The reward for prospective customers can be a discount ranging from 10% to 40% off a standard rate. The drivers most likely to benefit are those the standard insurance market is overpricing because of their age or other factors, says Mike Brockman of insurethebox, a British underwriter” Economist “Insurance and telematics . Feb 23, 2012.

Amusingly, a UK insurer launched a campaign in January called “Drive Like a Girl”. The intent is to goad young male motorists to drive more carefully with the temptation of wads of savings. I understand the market is growing quickly because customers like personalised discounts. Now if I can gaze into that crystal ball for the next lottery draw…

Andrew Gregson consults and speaks on Pricing Topics

How to Price for Profit

Posted on February 28, 2013 by andrew.gregson

How to Price for Profit how-to-price-for-profit

In the age of Black Friday megasales, ubiquitous smartphones and “big data” mining, the pricing wars have shifted onto an entirely different battlefield. And both shoppers and vendors are turning to high-tech weapons.

On the consumer side, buyers have access to apps and websites that give them real-time price comparisons, but companies such as Decide.com are taking that up a notch. By grinding up historical pricing data for electronics, appliances and other goods, the Seattle-based app maker enables users to game out the timing of their purchases to coincide with low-ebb periods (which, as it turns out, don’t necessarily occur during traditional sales blitzes).

Retailers like Wal-Mart and Target are responding by applying mathematical formulas to shopper psychology, luring us in with a $9.99 backpack but knowing we’ll also buy two shirts and a lunch Thermos for our child. Amazon.com, one of the sharpest players in this arena, taps so-called “dynamic pricing” algorithms that adjust list prices to individual buyers based on such factors as the value of their past purchases.

Where does this leave small companies? Having to raise their game significantly in how they set prices for their goods or services… for the full Profit Magazine, go to

http://www.profitguide.com/manage-grow/strategy-operations/how-to-price-for-profit-47906

The 3 keys to get your price

Posted on February 16, 2013 by andrew.gregson

On February 2, 2013 the CBC aired an episode of Terry O’Reilly’s program, Under the Influence. The theme of the program was about choice and about how a customer makes a decision when a marketer gets a product in front of you, the buyer.

Do I buy or not?

Given too many choices of products or services a customer will simply NOT make a decision and walk away.

We are, in this modern world, bombarded by radio, TV, junk mail, and spam to make a decision and buy something. Instinctively we tune out rather than make a bad decision. This is because, according to Terry O’Reilly, we, as humans, have an innate ability to make a fixed number of great decisions per day. After that decision fatigue sets in.

There are deep parallels with how the same process of making a choice works in the pricing world as well. Do I pay this price or that?

In my observation with clients and in my own research, too many price points with the product or service that a company offers leads to decision overload. When one of our clients confronted his customer with 14 different price points on similar products, sales stagnated. The customer walked rather than make a decision.

To solve the problem, we reduced the list to 3 prices and sales improved.

Why 3 prices?

A single price is a take it or leave it ultimatum. No one is comfortable with that and it is simple to say no.
Two choices are still a bit black and white.
Three choices appeals to our very human need to be in control, to make an informed decision that can be explained simply thereafter to a spouse or business partner.

Moreover, we could now create a price list for the client that went from good to better to best.

But in order to improve profits we deliberately made the middle product most attractive.

The middle product had a combination of useful but not too elaborate features. The middle offering was better that the plain Jane economy model. The middle product was not too high in price but certainly not the cheapest. Since most people equate quality with higher prices, we strategically placed the middle product to be an easy consumer choice. By the way, it was also the most heavily inventoried product.

This is the path to improve profits. Your company product and service must stand out but when the customer is considering the pricing decision, there must be a choice, just not too much choice.

To Build Your Business bring your pricing structure into 3 unique products lines with defined benefits for the clients to choose from and watch your sales and profits grow.

Article written by Andrew Gregson and Donald Robichaud

How to Kill the Sale of Your Business

Posted on February 5, 2013 by andrew.gregson

Great article from Wayne Vanwyck of Profit Guide

Enjoy, Andrew

Now’s the time to start your 10-step succession plan

Question:

If you’re on the railway tracks and you cover your eyes and ears to avoid a train barrelling towards you, will you still be squashed like a bug?

mask-covering-its-eyes This is not a trick question. The answer is “Of course you will!!!” Physics works the way it’s supposed to. A train going 100 km per hour won’t even feel the bump. Your choice to be oblivious to the impending disaster doesn’t change physics. You could say, “I hate physics!” but physics doesn’t care. It will continue to operate as it always has.

If you are a baby boomer business owner who has chosen to disregard the impending tsunami of change that’s about to hit our generation, you’re no smarter than the person on the tracks. In the very near future, a giant, destructive wave will sweep through North America laying waste to the businesses, employees, families and customers of entrepreneurs who have covered their eyes and ears in a misguided attempt to ignore physics. Communities will be affected. Unemployment will soar.

What’s the big deal?

In the next three to 10 years, millions of Canadian businesses will change hands as the boomer entrepreneurs slow down or retire. Because of the wave, you may not be able to sell your business for what you want—or at all. According to Andrew Rogerson, author of Successfully Sell Your Business, only one in three (U.S.) businesses with over 100 employees are able to sell them when put on the market. For companies with less than 10 employees, the number is only one in five! If only one in five will sell in more normalized times, what will happen over the next 10 years when it will be anything but normal as a massive number of baby boomers look to sell or transition their business?

The wave metaphor creates an interesting image. Can I prove that it will happen just like that? Predictions can be wrong, but ignoring them completely can be construed as willful blindness, a phenomenon labeled by Margaret Heffernan. In her book of the same name, she lists several examples of well-known historical events, which in hindsight had all the markers of a pending catastrophe but people paid no attention to the information in front of them. Nazi concentration camps, Enron, Bernie Madoff and the subprime mortgage disaster all had indicators of problems long before each crisis peaked. But most people averted their gaze and chose not to believe the signals because the truth was too hard to stomach.

The ‘fiscal cliff’ in the U.S. is an early warning signal. The failure of European countries like Greece is another. The fall of titans like Kodak, Hostess Brands, Lehman Brothers and 465 U.S. banks from the start of the financial crisis in 2008 through the end of 2012 is still another.

‘Too big to fail’ is an argument that lacks substance and credibility in 2013. ‘It’s too early to plan’ is another. What should you do?

Confront the wave. Open your eyes fully and look at it. Get the facts. The wave doesn’t care if you see it, hear it or acknowledge it. It’s still coming.
Be honest. Tell yourself the brutal truth. This is not the time for rose-coloured glasses. Look at your business objectively, realistically. Get a professional valuation. Consider your options. Involve your spouse. He or she will help.
Get off the tracks!! Establish a sense of urgency especially in yourself. Your employees will resist change and try to stick to business as usual. It’s up to you to push beyond the status quo.
Your business should always be ready to sell. It takes a few years to get it ready if you haven’t already started. Get it ready.
Prepare your management team to be able to run the business without you. Take more time off, more vacations and coach them to make better decisions on their own.
Get to know some business brokers and find one you trust.
Find a successor if you want to keep the business, someone who can take it to a new level and maybe become an investor or partner.
Develop and document processes, best practices and policies so they can be followed even if you’re not there to direct and manage them.
Begin to draw more money out of the business and reinvest it. Diversify your assets. But don’t bleed the company dry. It still has to show a profit to be sustainable.
Get a business coach who can help you stay focused on doing what’s in your best interests, even if it’s uncomfortable now.

Today the water’s up to your ankles. You may still have time to act, but it’s rising. Move!

Wayne Vanwyck is the founder and CEO of The Achievement Centre International in London, Ont., and Callright Marketing Services in Kitchener, Ont. He is the creator of The Business Transition Coach Forum, the author of the best-selling book Pure Selling and his recent book The Business Transition Crisis: Plan Your Succession Now and Beat the Biggest Business Sell-off In History. He has been training and coaching business owners for the past 28 years.

What is a Business Turnaround?

Posted on January 28, 2013 by andrew.gregson

Business going over the cliff In the corporate world, a turnaround specialist is brought in to restore the fortunes of a stumbling company.

Typically, this solution means replacing entire layers of management, cutting cost and jobs, and much needed attention given to new and existing product lines. We read about them in the business section of the newspaper all the time. Think of the GM and Chrysler restructuring process.

In the world of small to medium size business, the focus is different – typically on finance and sales.

In large companies the financial side of the business is typically well managed, financial statements are in order and current; the relationship with creditors and banks managed.

In the small to medium size business world, this is almost never the case. The situation might be that the creditors are calling everyday demanding payments, bailiffs arriving to seize machinery, bank Lines of Credit being withdrawn, and suppliers cutting off credit. The business of the company is effectively on hold until there is some resolution.

The company bus is half way over the fiscal cliff.

Sales in small to medium size business companies are typically a problem. Sales have crashed and the company has lost it way. Since small to medium size business businesses depend upon an owner to be the salesperson in chief, sales suffer if the owner is distracted.

All creditor calls, bank demands, court appearances and demand letters distract the owner from making sales. Falling sales translates to less cash to smooth the waters with creditors. And the cycle begins again.

But one factor in a small to medium size business turnaround is quite different than a corporate world turnaround. In the corporate world, the Board of Directors instructs CEO’s and General Managers to make changes.

In the small to medium size business world, the owner is alone, struggling every day with a crush of problems, not related to building the business nor satisfying customers. Sales suffer.

Professional help is needed. Why?

A turnaround specialist enters a company with a fresh eye, knowledge and skills and enjoys complete objectivity. The professional is able to spot problems and create new solutions that may not be visible to company insiders simply because the latter are too close to the subject.

The turnaround manager has no political agenda or other obligations to colour the decision-making process, allowing him or her to take the unpopular yet necessary steps for survival.

When do you call in the medics?

But the timing is important. Each day lost in not hiring the expertise translates into just two things – more cost and more pain.

Having a Business Turnaround Strategy can help you Build Your business and create a more profitable company.

Article written by Andrew Gregson and Donald Robichaud

How to Borrow Money and Build Your Business

Posted on January 19, 2013 by andrew.gregson

borrowing cash to save your business.

Turn your business around with the right borrowing strategy

The bank manager just phoned and asked for full and immediate repayment of the line of credit because the latest, (and they were late!), financial statements showed continuing losses and falling sales. The company’s assets are eroding fast and the bank wants its money back while it can.

Now you need to find money. How will you do that?

The following 5 points illustrate what a potential lender sees and how to improve your chances.

You are one of thousands lining up at his door to ask for money for your faltering business. So you must stand out. Lenders do not share your enthusiasm for your business. Every borrower makes unbelievable promises just to get that much needed cheque. The business owner has doubtful credibility because the business is in trouble and the owner is always to blame.

You need a plan. A written business plan, in order to be believable. You will need a business plan of at least 25 pages detailing your entire idea of how you will make the business work again. No false promises please – no lender will be interested in profit or sales claims that cannot be proven.

Lenders have no interest in a plan that merely returns a business to “normal”. Normal led to trouble once and now a radical change is needed.

The best radical change will be to illustrate a way to improve the business by a multiple (2 times or 3 times) and not a percentage.

Business Turnaround – If you can turnaround your business, what is the big upside that shows a substantial increase in profits? Will it result in more cash, more assets, no debt? How long will it take?

If the lender hands over a cheque:

How will you spend it?
Will you take the cash and run?
Will you repay your mother-in-law’s loan?
Will the money be spent on things that will have an immediate return on the investment?
Or are you asking the lender to share in the risk and debt?

Detail the use of the funds. Are you buying newer machinery? Investing in a new product line? Lenders have no interest in buying other people’s debt, so the debt will remain.

Handing over a cheque is not the problem for a lender. After all, their purpose is to get money out and working.

But how will they get the money back?
Have you ever given credit (or made a cash loan) to someone and had load of trouble getting it back, writing off the interest in the end and feeling thankful that you got the original money back?

Detail the exit for your lender. Give short time lines of under 3 years for return of capital. If you expect your lender to act like a bank and stay with you with lines of credit for the next 48 years, then go to a bank. Other lenders need to know how and when they will get their money back.

The lender wants to know what you are offering in return for the loan.
How is it secured?
Your home?
Shares in a stumbling company?
Are you willing to give up control for a period of time?

Be prepared and realistic in your offer to lenders. Detail the security offered and what the asset is worth today and will be worth in 3 years.

There are no guarantees in the lending world that your request will meet with success. If you have by luck chosen a lender who understands your industry and you have a believable plan, you might just leave with a cheque.

At Floodlight Business Solutions we understand what it takes to convince a lender. Have you got a decent business that is in temporary trouble?

Give us a call to discuss your business turnaround strategies and we can help you Build Your Business.