There are two ways to improve your strength: internal and external

Improving Internal Strength:

You don’t build your castle during a battle.  Yet, we often see companies trying to “look better” in the middle of the loan application process.

Plan in advance to improve your FICO Score.  If that means hiring someone to help you, then call us for some references.  I like to see executive improve their scores at least a year ahead to a significant financing.  Doing so, allows you to pay off things like higher interest cost factor loans.  Professionals who judge loan applications know if you use a lender that specializes in companies in trouble, that you have issues.  Get these companies off your credit report.  You might as well scream “We’re desperate!”

We often advise that pre-financing planning is a good time to review your CPA and business attorney relationships.  Have they helped you with issues before or after they occur? It is time for a change, if they are not proactive in guiding you before you make a decision.

Liens and other assignments should also be cleared if and when you can.  Lenders prefer simple decisions and clean accounting records. They also give these clients the best terms.  Go through your balance sheet and income statements annually and look for deadwood to remove.

Vendor relationships are also often sources of ideas for looking better. Vendors like long-term relationships. Start paying your key relationships faster, and over a year you might earning better terms during the next contract renewal.  You may also be considered for vendor financing to lower your loan balance at the bank. Structuring these better can make your balance sheet look significantly better.

Improving External Strength

We are struck by how little time we see invested in key external relationships.  We know executives have lots of demands on their time. Yet making a business friend into a strategic partner is one of the easiest and profitable ways to look better to outsiders. Think it of the difference between you bragging publicly (doesn’t help much) to someone else bragging about you (helps ENORMOUSLY).  Make your vendors also your salespeople, by showing them your operations and letting them help you.

One of the most important lessons of the pandemic has been the value of “social capital.”  It is such an important concept, that we are doing a training webinar in November on it. Let us know if you would like to participate.

Watch the replay of "The Psychology of Management During Economic Uncertainty - with Dan Stover" Click to Watch