Tips for improving your chances of getting financing.
With the poor economic environment over the past few years many people have given up or delayed there dream of owning a pharmacy and probably for good reason as unless you were established or wealthy receiving a loan for any business venture was very difficult. But over the last couple of years the ability to obtain capital has improved and is feasible for just about anyone who really wants it. With that said we wanted to provide a few tips on what you need to have prepared to improve your chances of gaining the financing you need:
1. Skin in the game- financiers want to see that you are able to put up some cash, whether it is money you saved, money from relatives or even transferring your 401k. Companies providing loans want this for a couple of reasons, to see you’re confident in the business plan, if you have something to lose you are more likely to do what it takes to succeed and lastly they want to limit their risk the lower the cash to debt ratio the better the chance of the financier being paid back.
2. Business Plan - You have to have a fully researched plan to present. On top of that you need to know every aspect inside and out so when the financier asks a question you have an answer. This plan should outline income projections, information about the business like how it will make money, what are costs associated to doing business and what are the risks.
3. You – they want to know who you are, your background and resume. Remember the financier is giving you the loan not the business and their trust in you is what gets you the money.
4. Documents – lastly have every document you can think of prepared, assets, tax returns, credit report and legal (business licenses, llc, etc).
Financiers may ask for more or less than the above but the good news is if you want the money bad enough and prepare you can get it!