Do You Need A Financing Consultant and Cash Flow Specialist To Assist In The Development Of A Workable Financing Strategy?

Ok, so what exactly is a financing consultant and cash flow specialist and why would you need one?

A financing consultant and cash flow specialist is someone who can work with you to more accurately project the timing of cash inflows and outflows of the business and the timing and amount of any financing required to maintain the positive cash position required for optimal business performance.

Why is this important?

Because any for profit business is all about cash flow. No cash flow, no profit.

Yet, despite this univeral truth, most businesses do not have any formal type of cash flow management or financing strategy, and as a direct result, it costs them money.

How does it cost money?

Here's just some of the more obvious answers to this age old question.

Cash flow shortages are funded by higher cost debt financing like credit cards. Not only are credit cards typically more expensive, but high reliance on them is likely to reduce your credit rating which can both limit your ability to raise additional capital and cause you to pay a higher cost of capital on both existing and future credit facilities.
Cash flow shortages can stop sales from happening when the inventory and/or accounts receivable associated with additional sales can't be financed.
Cash flow shortages can eliminate volume order discounts available to the business.
Cash flow shortages can destroy trade credit when payments fail to be made on time.
Cash flow shortages can destroy the ability to acquire assets and expand the business on a timely basis.

So if you're short of cash, you just go get some more, right?

Have you ever heard the expression, "I can only get financing when I don't need it"?

While this is not absolutely true, it makes an enormous amount of sense if you stop to think about it.

In my opinion, 80% of financing activities are unplanned or under planned, meaning that financing is typically sought very close to the time its required, with very little margin for error.

Here's a few examples.

A seasonal business occasionally has a cash flow crunch in its off season. When a cash flow crunch arises, the business frantically tries to locate financing. Asking for capital from its weakest possible position, the hunt for an interested lender becomes challenging and the potential cost of financing is elevated. The business owner becomes angry and frustrated with the fact that he's having such a hard time acquiring capital.

A wholesale business is excited about all the new business its lined up. After months even years of working the circuit, going to trade shows, developing credibility with channel partners, the business is ready to take it to the next level. All it needs is more capital to finance inventory and accounts receivable. But with newly acquired purchase orders in hand, the business discovers that people aren't lining up to give them money.

A company wants to expand through acquisition and spends two years to find the right candidate then spends an additional 3 months doing due diligence before a purchase and sale agreement is signed, subject to financing of course, only to find out that the deal as written is very difficult if not impossible to finance in both the way its structured and in the time period allowed.

The common assumption made in each of these cases is that at the moment financing is required, it will appear or at least be easy to locate and secure.

Bad assumption.

This is not to say that you won't be able to secure the financing you're looking for, but without some amount of pre-qualifying on your part, you run the risk of not having funds when you most desperately need them.

By proactively seeking out financing sources that are going to be interested in your business, in your industry, in your geography, at a certain time of the year in their lending cycle, you create the ability to factor their financing model into your potential future financing needs and planning process.

Put another way, a good business practice to follow is to inquire about financing before you actually need, or "when you don't need it"

A financing consultant and cash flow specialist works with business owners and their advisors to create "financiable" scenarios that can be put into place without any or minimal business disruption.

The value to you of a financing consultant and cash flow specialist is that they will directly or indirectly save you money.

How?

Having a financing plan that accurately matches up with your cash flow needs will result in not having to suddenly go after additional financing at the last minute, or worse when payments are already overdue, which will ... save you money.
Having a financing plan that will increase the probability of a potential acquisition closing will ... save you money.
Getting timely access to relevant lenders that can provide you with the lowest available cost financing applicable to your situation will ... save you money.
Developing a financing strategy that provides valuable and timely advise to your other professional advisors (lawyers, accountants, consultants, etc.) will result in less back and forth, deal revisions, rework, and deal failure where the only winners are the service providers. Again, this will ... save you money.
A financing strategy that solves the capital financing issues the first time around and allows for future uncertainties in business cash flow, will save you from having to repeat the exercise more than once allowing you to maximize your focus on business strategy and operations, which will effectively .. save you money.
In general terms, if outside capital is required for growth, acquisition, expansion, consolidation, or deficit financing, and it cannot be secured in a timely manner with acceptable cost and terms, it will ... cost you money.

Of course, you can try and do this yourself, but the incremental cost and risk may very well exceed the cost of getting expert help.

Here's how you contact me directly about financing consultant services

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