Manage Your Business Expansion Process

Businesses need capital to grow. While business growth can prove very rewarding, it often places strain on financial resources an sometimes calls for new capital injections by business owners.

Credit offers access to growth capital.  When preparing a business for expansion credit, the amount and types should be carefully considered.

Follow these important credit planning steps prior to seeking expansion capital for your business:

Step 1- Define your sustainable growth levels

Step 2 - Assess and Upgrade Your Financial Reporting Systems

Step 3 - Calculate Healthy Equity Levels for Your Company

Step 4 - Establish a Financial Management Routine 

Step 5 - Assess Your Management Capacity & Project Gap Fulfillment Costs

Step 6 - Create a Credit Needs Chart to support your Expansion Plan.

Step 7 - Implement Your Plan 

Step 8 - Review and re-adjust your plan as needed.

DEFINING CREDIT NEEDS

How Much Credit Do You Need  When computing the amount of credit needed to support business expansion, consider your capital needs in these for areas:

To Determine the Right Type of Credit Needed to Support Your Growth, use our Credit Match Tool

Sustainable growth level is the growth rate that the business can achieve without negatively impacting it debt-to-equity ratio, a key measure in financial stability of the company.

When implementing a Healthy Credit Plan for your business, incorporate sustainable growth rate computations into your plan.  This will help build your credit profile and avoid a common pitfall in growth financing process.

Building and Preserving Healthy Equity Levels for your Expanding Business is a must.  Your business equity represents the dollar value of personal and business investment remains in the company to help it grow. As a company demonstrates a track record of making profit, the owner's temptation to draw down on that profit for personal or tax purposes often increases.

Equity retention is a key factor used in commercial credit evaluation.  Business equity is commonly compared to business debt level as a measure of risk.  It measures financial commitment to the company.

Use our Balance Sheet Forecast to project your anticipated debt and equity levels.  Then, use our Financial Ratio Worksheet establish a healthy equity level for your growing business.

Just because your loan is denied, does not mean that you company cannot obtain credit. It simply means that you have encountered a credit obstacle and need to overcome it. 

Overcoming credit obstacles takes work, but it can be done.  

Steps for Dealing with Loan Denial:

Step 1 – Find out why. Contact your lender and request an explanation of the reasons for denial in writing.

Step 2 -  Review Your Pillars. Review the reasons for denial and compare them to the 8 Pillars of Performance, outlined in the Healthy Credit Practices Program to determine where you size up in comparison to terms of Healthy Credit Practices.

Step 3 – Develop a Credit Plan. Outline the actions needed to overcome your credit obstacles.  Examine your credit needs with our Credit Match Tool and  confirm that you are seeking the right type of credit for your business.

Step 4 – Get Help. Find a local non-profit consultant or a Healthy Credit Assistance Provider www.healthycreditpractices.com/creditassistance that can help you outline a plan to overcome your credit barriers. 

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