Being prepared for financial conversations
Even though you may be experiencing a great deal of stress, it is important to keep a clear mind and take the time to prepare for financial conversations before they happen. Whether you are approaching a friend, family member, or a traditional bank for a loan, the due diligence requirements during regular times will still apply. Each source will have different interests, such as the potential return on investment or your ability to repay a loan. It is critical that you anticipate concerns and know what documentation each source needs, or at the very least, begin conversations with a good level of knowledge about your financial situation.
Here are some tips to ensure you are prepared:
- Have your cash flow budget ready. Know how much you need to sustain your business today and during recovery over the medium to long-term.
- Know the level of debt you are comfortable with and what your business can handle.
- Be realistic with your revenue forecasts.
- Relief funding and support programs can be highly competitive. Find out the criteria and follow the instructions carefully and thoroughly.
- If a funding application is rejected, take the opportunity to ask for feedback, and if possible, resubmit.
- Do your own due diligence and read over agreements carefully, understand the caveats.
- Go with an understanding of your financial position and performance before the pandemic began.