If you have a strong financial statement and seek financing from a current lender, ROI suggests offering to increase the frequency of your progress report meetings. You also should present at least one example of a tough business decision you recently made. If you have a weak financial statement but are pitching to a current lender, do the above and consider calling your situation a turnaround. “Times have changed, and so have you,” Johnson says. Then, pay back the loan faster than required by liquidating some of your assets, she adds.
Strong financial statement, but pitching to a new lender? ‘Sell’ your credibility along with your respect for their institution. Provide exhaustive documentation, including business and personal financial statements, and three years of tax returns. But what if you are approaching a new lender with a weak financial statement? Do all of the above, and then be prepared to commit to a sacrifice — i.e. liquidating an asset to pay back half the loan amount in 90 days, the partners recommend.
These tips apply whether you’re securing funding from a bank, a credit company or your in-laws. In all cases, you’re communicating on the lenders’ terms.
Finally, Johnson and Outcalt recommend seeking a local lending source rather than a regional or national institution. “Community banks are a much better resource for an independent retailer because they’re making more decisions on loaning locally, not regionally,” Johnson says.
I recommend checking out the ROI’s website (www.retailowner.com), which has calculators, help documents and other tools for managing retail businesses. Who knows; a tip from another retail sector might help you out. Some parts of the site require a subscription, but the team also hosts weekly webinars, some of which may be accessed for free.
As the economy revs up, those who survived the Great Recession must make strong and well-thought-out business decisions. Sure, it’s not exciting, but it keeps you in the black.
This story originally appeared in the July 2012 issue.
