Funding Sources, CFO

Funding Sources

By Tyler Garrett, executive assistant to Randy Russon, founder of TOP CFOS

A little extra cash can be very beneficial when a business isn’t making enough money. These extra funds can come from a few sources, but before seeking these funding sources, a company needs to be able to display its finances professionally. This includes preparing excellent profit/loss reports and balance sheet statements. If you’re trying to impress an investor or banker, then your presentation of this information can influence a yes or no response. Just like fly-fishing: You have to make the right presentation, or the big browns won’t strike. It’s the same when approaching an investor or banker.

It’s also important that you line up your financial statements using GAAP (Generally Accepted Accounting Principles) as your guide. GAAP suggests setting up financial statements in a way that’s very easy to read and understand. It’s also great to keep those statements to roughly two pages. This concise approach makes it very easy for the investor or banker to see how you’re doing without having to comb through pages of information.

Although debt financing is available to firms large and small, it’s still true that “there is strength in equity.” Sure, you can grow quickly by using debt financing to fund operations, but there’s a risk in doing so. If nothing goes according to plan, you can find yourself in a lot of trouble. But, if you use equity financing to fund growth, your only pain is keeping investors happy. You don’t have to meet stringent obligations like you do with debt financing.

Now, let’s review some funding sources. The following are possible sources of funding for your business; feel free to discuss any of them with us:

401(k) financing

Angel investors

Asset based loans

Bootstrapping

Business equipment leasing

Community development financial institutions

Credit card loans

Crowdfunding

DPOs (direct public offerings)

Finance companies

Friends and family members (including your rich uncle!)

Government venture capitalists

Grants

Home equity financing

IPOs (initial public offerings)

Personal savings

Reverse mergers

Royalty financing

SBA loans

Traditional bank loans

Venture capitalists

Remember that a good CFO can provide great guidance as you seek funding for your business. A good CFO can structure deals that will be in the best interest of your business. This is their area of expertise, and their services are worth employing. If you’ve yet to hire a full-time CFO, consider outsourcing those CFO services to us!

We hope you’ve enjoyed our blog. Remember, TOP CFOS offers the finest CFO services to companies that want to take their businesses to the top. We love being the catalyst behind firms’ soaring profits, and we’d love to be a part of your team. Our contact info can be easily found on our website, so feel free to reach out anytime.

Our next post will come from the Customer Service category and is titled “Exceeding Customers’ Expectations.” Thank you for joining us!

(For your convenience, we provide an RSS feed at the bottom of our website so you can subscribe to our blog.)