A Financing Consultant is a professional that works with businesses to 1) locate suitable debt or equity capital for a business, 2) assist with cash flow management, 3) assist with the owner's exit plan.
The first activity is much the same description that would be given to a financing broker, although I would argue that a financing consultant provides a great deal more value added than a financing broker.
Maybe that's a good place to start.
The process of bringing a borrower/owner and lender or investor together is a brokerage process whereby a consultant gets paid a fee for bringing the two sides together.
The financing broker provides an introduction between the parties and may help with the faciliation of information back and forth in an effort to see the transaction completed which in most cases is required before the broker
can get paid.
Outside of mortgage brokering, there is no real requirements to be a financing broker which can result in very low value added if any.
A financing consultant on the other hand has a financing background and is knowledgable about how to properly structure and complete deals that make sense and provide good value for both sides. A financing consultant typically would have a financing related university degree, a professional designation related to finance, and perhaps even one or more professional affiliations to demonstrate their business approach and business ethics.
So there can obviously be an enormous difference between the two consultants and individuals need to make sure that they are aware of creditials and experience of the anyone they are working with to secure financing for their business.
Cash Flow Management
A financing consultant will work with a business to develop, implement, and manage cash flow systems that make sure the business always has the working capital required to operate.
Much of cash flow management is basically implementing proceses and procedures and responsibilities to make sure the business cash flow is in order. For this particular activity, the financing consultant can also be referred to as a cash flow specialist
.
Exit Plan
The third type of service you can hire a financing consultant for is with respect to your exit plan. The exit planning process requires a great deal of preparation of financial information and reports to show prospective buyers the income generating value of the business. While accountants are the actual statement creators, financing consultants work with the business owner to develop a future horizon that will meet both the needs of the buyer and seller.
Exit plans are more about how to sell the business than when to put it up for sale. Selling a business for the greatest return can take several years to orchestrate. The process involves not only performance documenation, but due diligence documentation, deal structure, and buyer finance which in many cases will involve the seller in some way shape or form.
A good financing consultant can save you a large amount of pain, time, and money by making sure that all material and relevant issues are being dealt with so that you don't have problems further down the road.
If you would like to speak with further about financing consultants, please click on this link.
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