Financing Your Business
What’s in it for me?
This is the first question you will get, although in most cases it will not be put so bluntly. Every lender wants to know whether they will get their money back, and what interest they will earn on their money while it is outstanding.
Put yourself in their shoes
Every lender has a horror story of a borrower who looked so nice, and honest, and hard working, and had such a great business plan …and then it all went bad and they moved to Mexico, without paying them back.
Be realistic
Everyone wants to open the best looking clinic, but you’ll probably scare off your lenders if your plans are too ambitious.
Keep it simple
How much do you need to borrow? How much interest will you pay, and when will you pay the money back? Does the business plan make sense?
Share the risk
Are you putting up all your own money first? Will you give additional security such as a lien on your car or a second mortgage on your house? While no lender wants to go through the hassle of collecting on this type of security, it shows your commitment.
Make it as easy as possible for the lender
Draw up the legal documentations. Give them post-dated cheques.
Establish trust
If you say you are going to phone back this afternoon, do it. Show that “your word is your bond.”
Communicate
Talk about your problems, fears, uncertainties. If you can’t make a payment, phone before the cheque bounces. And come up with a plan to make good on the money as soon as possible.
