“Don’t lend money you can’t afford to lose.” I can’t find the origin of this, but it really rings true.
Recently I received a request for an unsecured loan with no personal guaranty. Even under perfect conditions this would be next to impossible, but in today’s business climate, it probably doesn’t exist.
Think about it. Would you lend money to someone you didn’t know with no collateral, and no personal guaranty? And if you would, why would you do it?
I bring this up because very soon businesses will be looking for funding. The government money you’ve received will have been spent to make payroll, pay for inventory, and basic overhead. The need to have steady cash flow is one of the primary needs for a business to keep going and to grow. While the business situation is improving, payments will still be 30-45 days out, maybe longer. While you’re marketing your business and products, reconnecting with customers, and getting new ones, you need to balance your cash flow.
Remember, when you are looking for funding, what is involved, and the risks. Understand the reasons for certain criteria, questions, and documents, and the personal guaranty. Years ago, a banker answered the question of the need for personal guaranty, with ‘If you are not willing to stand behind your company and guaranty it, why should I loan you money?”
Businesses are running through their relief funds at Mach speed. Shortly they will be looking for more funding. Bank loans and lines of credit from traditional financial institutions will be difficult to get.
Factoring your invoices is a fast, efficient way to improve your cash flow without incurring debt or giving up equity. Yes, it still requires, in most cases, a personal guaranty, and a simple list of documents. This type of financing can help bridge the gap until your company is bankable again.
Like more information?
Guiiln Funding (AKA The Money Lady)