KNOW WHAT YOU NEED Understand how you intend to use business financing, how much funding you need and how you intend to repay loan. Be able to communicate this clearly and confidently with prospective lenders.

UNDERSTAND YOUR CURRENT SITUATION If you are an existing business, are you profitable, and does your balance sheet have positive equity? What does your credit look like? Have a clear understanding of any existing liens and lien priority. Know your credit score and answers to derogatory credit issues (liens, judgments, slow pays, collection actions) before presenting your application. If there have been credit, profitability or equity issues in past, present a credible argument as to why these issues have been resolved or how this loan will change this situation.

KNOW YOUR OPTIONS All lending is critiqued from a risk standpoint. Certain levels of risk will qualify for certain types of financing. The level of risk is reflected in cost of financing. The more secure a lender's money is, less it costs you. Get creative. Financing takes many forms, and is available from a wide range of sources.

Standard (conventional) bank financing usually offers best interest rates, however it is most difficult to qualify for. These loans appear as a long-term liability on business balance sheet. Conventional loans are available through banks and other lending institutions and can be guaranteed in whole or part by SBA.

Revolving Lines of Credit are another form of business financing. This type of loan is secured by accounts receivable or inventory and is available from a bank or an Asset Based Lender. Credit cards are a form of revolving line of credit. An Asset-Based Line of Credit (ABL) is considered alternative financing and is available to borrowers who are too highly leveraged for a bank.

Why a Cash Flow Statement? Many business owners believe their financial statements will give them all information they need. Financial statements are an historical tool that shows you where your business has been. A Cash Flow is fancy name for a working budget that tells you how much cash your business actually has. Working in sync with your balance sheet your cash flow should be an easy-to-read tool that allows you to monitor sales, costs, profitability, collections and cash. It allows you to plan for future cash needs for growth, while identifying operational issues requiring immediate action.

Successful cash flow planning does not require a degree in accounting. What you need is real-time understanding of where cash is originating, where it is going, and how much is left over (just like you do at home). Businesses need to operate with a cash flow model that looks ahead one year, month by month, and is updated with actual results every week.

Create a Worksheet The formula for successful cash flow management is deceptively simple. Money in. Money out. Money left over. If there isn’t any money left over, then you need to do something differently.

Start with Sales. Sales is work performed that is documented by cash register receipts, guest checks or invoices. Project amount of sales you anticipate month-by-month starting with current month. Sales should fluctuate when you consider seasonality of your business. Break sales into categories and be conservative.

Project your collections month by month. Collections are money you put into bank in form of cash, checks or charge card vouchers. If Sales do not equal Collections, you either have accounts receivable or a cash control problem.