Ellen McIlhenny - The Smart and Savvy Exit – Expanding Before Selling.
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Now that the Paycheck Protection Program from the federal government has ended, where are small businesses that are still hurting from months of lockdowns going for finding? Last month saw an uptick in loan approvals from all types of lenders including banks, credit unions and alternative lenders. Not a surprise, as many businesses will need capital to start things back up. Last year was a year of cash conservation. A sell-off of equipment or inventory may have been a necessity to ride out the storm. Now pent-up demand is a great justification to infuse more cash in the business.
My guess is that in the short-term, we are going to see much more activity in the alternative lending market. Alternative lending refers to any loan that is secured outside of a traditional bank. Banks will be dealing with customers whose creditworthiness most likely took a hit in the past year, so the loan process could be long and arduous.
Alternative lenders are more accessible than banks, and often are more streamlined in their lending processes. In addition, they often provide greater flexibility with certain loan requirements like credit score and annual revenue.
Types of alternative finance include everything from direct lending and equity financing to debt financing. Alternative lending companies specialize in business lending and financing without the services of a traditional bank.
While alternative loans typically require higher interest rates than banks, alternative lenders can be more responsive to changes in repayment schedules.
Show Objectives - The Why
Today I will be talking about expanding your business before selling, and why that might be important to you.
Find My Podcast at https://pod.co/future-financial-confidence-with-ellen-mcilhenny
Next Week: Confidentiality when selling a business
Written by Ellen McIlhenny
Owner of CFO Plus Services, a Fractional CFO services firm which also offers Back Office Bookkeeping Services. Author of the business novel The Big Turnaround; How Bad Management Nearly Destroyed an Exceptional Company. Check it out at https://thebigturnaround.com
You can connect with Ellen on any of her #cfoplusservices platforms or firstname.lastname@example.org
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