Three Critical “Post Recession” Rules to Getting Your Project Financed

Like most entrepreneurs you are likely in love, head over heels, with your baby… your new business venture. You have toiled on the idea for months or years even. You have thought out every minute detail in your head and, perhaps, even put it all down on paper. You are convinced your venture will be a winner and now only one thing stands in the way of your dream becomes an exciting reality…money.Whether you need several hundred thousand dollars or several million to get your venture off the ground securing financing is inevitably the most frustrating and mystifying part of the process. Most well- intentioned entrepreneurs with worthy projects don’t even know where to begin in looking for money, and often head down dark paths with unscrupulous individuals who will never be able to advance their vision into a reality.The funding maze can be daunting, intimidating and more often than not a fruitless journey to nowhere. With today’s conventional lending environment being so dismal for small businesses and start ups is there any hope for you to breathe life into your baby? Absolutely there is, but ONLY if you employ the right financing strategy.There are three critical “Post recession” rules that you must understand and employ for any hope of achieving financing for your project. The good news is once you understand the proper strategy to package and position your business you’ll be on your way!The Right LenderIt may seem overly obvious but unless you get your project in front of a willing and able lender you will not get financing. So what is a willing and able lender? Today that is a private lender and certainly not a bank. Angel investors, venture capitalists and private equity lenders are all very active in today’s lending arena. While 97% of the population has been moaning over the “Great Recession” these lenders, the top 3%, have been buying everything at half price the last three years, building their wealth and investment capital. But here is the catch…you have to find a lender who 1) has the available and liquid capital to invest in your project and, 2) is willing to invest in your specific type of industry and project. Angels will typically only invest within the industry in which they made their wealth, while venture capitalists typically invest in an entrepreneur’s reputation. If you have built successful businesses before you new venture may attract the interest of venture capital money. However, if you are new to the game an angel investor will likely be your ticket. And these investors will quickly be able to determine whether or not your business plan “works” or not.The Right PlanPlain and simple…your business plan is everything. It is the lone document, your singular chance to impress a lender and move him or her to take action and finance your project. Tragically 95% of all business plans are DOA (Dead on Arrival) because they are inherently flawed in format, content and mathematical viability. In short these fateful plans can’t possibly work and would be torn to shreds by a lender should the plan every make it in front of one!Business plans written by entrepreneurs are typically done using a template from the Internet that was designed to be utilized for submission to a bank, not a private lender. 99.9% of all business plans written by the entrepreneur are overly verbose and overly subjective. Lenders look to the business plan to be 100% objective, to point out inherent downsides to the business in assessing the risk factor of possible investment. These plans are not concise and don’t provide the specific data private lenders MUST see.If that isn’t enough to disqualify your plan nearly all business plans are written exactly the opposite way they should. They are mistakenly written with a flowery description of the business vision, maybe a mission statement, a look at the industry and why this venture will succeed in the marketplace, a marketing section and BAM into financials. The financials are most likely built to support the business plan suppositions in the preceding sections. They are often guesses and always impossible to achieve.An “elite” business plan, on the other hand, requires that a series of specific questions be answered in advance of writing the plan that will dictate the “hard” financial variables required. Once these “hard” variables are determined they will dictate the process and strategy for developing the financial projections and then the entire content plan itself is a result of these financial certainties. A plan written backward to forward stands an infinitely greater likelihood of seeing money than the way 99.9% of business plans are written!The Right WordsSo you now have your project in front of an able and willing lender, with an elite business plan that “works” for him or her to review. Then you get the phone call…”I’m highly interested in financing your project. Can you be in my office next Tuesday at 3pm to meet?” All of a sudden you are excited and terrified at the same time! At this stage there is likely a 75% chance your project will get financed. However a very large step remains that must be taken with precision for you to reach the financial end zone.When you speak with a lender on the phone and, for sure, when you meet with a lender face to face there are CRITICAL words and phrases to say and NOT to say. The reality is that you will likely get less than ten minutes in front of a lender to “close the deal.” The wrong words will literally sink your project. Not only do you have to convey supreme confidence with a lender it is equally important is to sound incredibly competent. After all, you are asking this person to invest a significant amount of money with you. They do not and will not make the mistake of investing in the wrong person, despite how great the project may be.Unless you are schooled as to the intricacies of this monumental interaction with someone who can change your life forever it is a crap shoot. If you say too much or say too little it might be an indication to a lender that you are not a good investment risk. 95% of all projects never make it this far, so look to someone who can help role play with you on what to say and not to say. Properly orchestrated your face to face meeting with the lender will be a resounding success and the last test to finalizing your financing.In summary there are undeniable rules of the financing game for entrepreneurs to follow in their quest for financing…ignore them at your own peril. The good news is that if you follow the blueprint I have laid out for you here by employing an impeccable financing strategy you will rise to the top of the heap and stand an excellent chance of turning your dreams into reality.

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