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Newsletter

April 2023

How to Position Your Company when Seeking Funding 

The way you present your company to lenders is just as important as how you present it to investors or potential partners. You want to highlight your company's strengths and demonstrate its potential for growth. You have a story to tell that is unique to your business and your funders should be part of your audience.

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Here are some key points on how to position your company when you’re seeking funding:

 

  • Emphasize your track record: Show potential lenders your company's track record of generating revenue, being profitable, payment history, and keeping or building a solid customer base.

  • Identify your competitive advantage: What sets your company apart from others? This could be unique products or services, a strong brand and reputation or exclusive relationships with suppliers or sellers.

  • Demonstrate market opportunity: Lenders want to see data that your company has stable and profitable operations with realistic potential for expansion, as well as opportunities for greater revenue.

  • Be transparent about your company finances: Provide accurate financial statements and detailed projections, including revenue growth, profitability and cash flow. Show that your company has a solid financial foundation. Be open with lenders about your business history, including loans and any credit issues.

  • Outline your growth strategy: Present a detailed growth strategy that shows how you plan to use the funding to expand into new markets, increase production capacity or launch new products. Ideally, consider having a five-year plan which is updated annually, showing your intent and strategy can have a big impact with lenders.

  • Highlight your management team (if you have one): Lenders want to see a strong management team with a track record of success. Show the experience and expertise of your executive team and demonstrate their ability to execute your growth strategy.

  • Be clear on how much funding you need: Be specific about the amount of funding you're seeking, how the funds will be used and what return you expect.

  • Demonstrate the company’s ability to service the funding. Provide the lender a detailed cash flow projection that shows how the loan payments will be made on time without incurring any stress on the company. Also, highlight any existing assets or collateral that can be used as security for the loan. This will increase the lender’s confidence in your ability to repay the loan.

It’s important to tell a good story when positioning your company for funding. Keep in mind that if you build solid relationships with your funders, they are more likely to continue to fund your business over time and help your company grow.

 

Call ThermoCredit to help find the right funding alternatives for your business. Call us at 504-975-8599 or email us at Seth@ThermoCredit.com to schedule your free consultation today. 

Sources:

 

BPlans: How to get your business funded: http://bit.ly/3ZzEHr0

 

Dallas Innovates: Positioning your business to access capital: https://bit.ly/4341ePp

 

Lighter Capital: 4 tips for positioning your SAAS business: https://bit.ly/40UAEXf

 

Marquee Equity: 7 ways to position your start-up for funding: http://bit.ly/3GbqIkm

 

Small Business Administration: Write your business plan: http://bit.ly/3GdFK90

How Can a Non-Traditional Lender Help Me Take My Company Public?

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When a company is preparing to go public, it often needs pre-IPO (Initial Public Offering) funding to cover operations, growth, or expansion. The goal of a pre-IPO loan is to help a company raise additional capital leading up to the share issue so company leaders can focus on the legal and financial details of launching the IPO. This applies whether the business will only limit shares to family members and employees—privately held stock—or if it will be publicly traded on an exchange.

In the past, pre-IPO loans were less common but now more lenders are offering them. Banks generally want to fund or underwrite larger IPOs. Smaller IPOs may not qualify for

conventional funding especially, if their shares are likely trading as penny stocks. Situations like this is where a small or medium size business going public may consider using alternative funding for an IPO. Alternative lenders can offer more flexible lending options and often able to take more funding risks than conventional ones.

If your small to the medium company has a solid market share, is expanding rapidly, and/or your goods and services are in demand, your business is likely to be attractive to alternative lenders. Your IPO is likely to increase the value of the company and raise additional capital, which is the sort of growth lenders like to see. Alternative lenders can be particularly attractive to business owners who prefer to keep control and ownership of their company for a pre-IPO loan, rather than venture capital investments or partnerships where equity and control are shared.

 

Alternative lenders are also likely to have industry expertise, connections, and strategic advice that can assist with taking your company public. In addition, they may offer a network of different financing options which they can pull together to provide a funding package. For example, a non-traditional lender could arrange for mezzanine financing, which is a mix of debt and equity funding. One lender might provide a line of credit or equipment financing while another lends money against a portion of shares, or equity, which they will hold as loan collateral or sell for a profit later if the company performs well.

 

A non-traditional lender can be a valuable partner in taking your company public. At ThermoCredit, we can help you navigate the right funding options and offer industry expertise and strategic advice, that can help take your company to the next level. Call us at 504-975-8599 or email us at Seth@ThermoCredit.com to schedule your free consultation today. 

 

 

Sources:

 

Enness Global: Pre-IPO Loans: http://bit.ly/4008s49

 

Fischer Jordan: Alt Lender Funding Strategy During COVID: http://bit.ly/3GuEoH2

 

Investopedia: Underwriting: http://bit.ly/3GsZtBC

 

Liquidity Group: Pre-IPO Funding: http://bit.ly/3Mqshi8

How Can a Non-Traditional Lender Help Me Take My Company Public?

Are you considering debt consolidation for your business? Debt consolidation can be a savvy strategic business move involving a business loan to merge separate financial obligations into a single monthly payment. Streamlining debt into one payment can have many benefits—it may provide lower interest rates in comparison to your other loans, and it might even improve your business’s credit score. Sound budgeting and a single monthly payment can be much less stressful than managing multiple bills, due dates, and payment plans.

 

Before applying for a debt consolidation loan, analyze which debts have the highest interest rate, since those will be the best options to consolidate. Calculate the total debt owed by adding up all of the payoff balances for each loan. At this point, you may want to reach out to your lender of choice to discuss the size of the loan your business can afford or run the numbers yourself using a business loan calculator. The advantage of working with a lender you have a relationship with can very often make the difference between getting a portion of the loan you want and getting the entire sum you need.

Different lenders will have different loan requirements, but most will factor your business’s income, credit score, and debt-to-income ratio. For many businesses, a consolidation loan from a traditional bank or credit union is out of reach because they usually require strong credit, positive cash flow, and an operating duration of two years. Very often small or growing businesses won’t qualify for loans from traditional lenders.  

 

Alternative lenders like ThermoCredit have the resources and experience to help. Our team can put together lending packages to help you consolidate your company’s debt and help you create a growth plan to go forward, all with competitive interest rates and less headaches than dealing with traditional lenders.  Where banks are focused on where you’ve been with your business, ThermoCredit is more focused on where you are going with it.  Debt consolidation is the first step in managing your company’s growth plan.  With ThermoCredit’s debt consolidation options, we provide the capital and you keep control of your company.

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Call ThermoCredit to help find the right funding alternatives for your loan consolidation. Call us at 504-975-8599 or email us at Seth@ThermoCredit.com to schedule your free consultation today.

DEBT vs EQUITY: How to Leverage Them to Your Advantage

Being aware of how to leverage debt and equity can be a real asset to your business.

 

Financial leverage is an important investment strategy that relies on borrowed capital as a funding source. This capital can help to expand your company’s asset base and generate sizeable returns. Business owners need to consider the advantages and disadvantages of taking out loans or seeking additional investors. Many factors come into play when deciding the best long-term solution for your business.

 

Tune in for tips and strategies to help evaluate what kind of financing would best fit your business.

Funding Strategies Conference

DEBT vs EQUITY:

How to Leverage Them to Your Advantage

Thursday, May 11, 2023

2-3 PM ET $29.99



www.fundingstrategies.net 

 

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