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Why You Shouldn’t Fear Change When It Comes to Financing

In life you go get annual checkups. Your business financing should be no different.

In my line of business, I deal with a lot of entrepreneurs who have been burned financially at some point in the past.

That’s part of the business landscape for just about everyone, but it often makes people unnecessarily gun-shy about their company’s finances. They also tend to make bad assumptions.

That leads me to the moral of the story:

Don’t assume that what was true with your financial legacy of the past remains true today.

I met recently with a client whose business had gone through a tough period a few years back when he couldn’t get a loan. The client told me that a couple years ago he didn’t even bother trying to secure financing, even though his company was more stable, because he assumed he was still likely to be declined. Even now that his company is prospering, he is still skeptical of his chances.

That’s the kind of thinking that can doom an entrepreneur to mediocrity.

If you ever dabbled in the classics, you might be familiar with Heraclitus, the Greek philosopher whose words ring true today: “Change is the only constant in life.”

That’s especially true in the world of finance. Always remember that both companies and markets are constantly changing. Interest rates go up and down, as do the markets. Lending standards may loosen or tighten.

An aside: Interest rates have been on the rise and a recession is long overdue, so if you’re thinking about revamping your financing, there’s impetus to do it now.

Check your financial arrangements every year.

Make it a part of your company’s routine, just like how in your personal life you go for an annual checkup (or should go). Even if you have all the loans you need, perhaps refinancing can save you some cash.

At the same time, you need to be considering your goals and objectives for the year since they will surely tie into your financial needs. A change in strategy might warrant a revised financial plan.

If you need new financing, now’s as good of a time as any. You might want to revisit lenders who’ve rejected you before, but there are many other options out there, some better than others.

As always, loans backed by the federal Small Business Administration (SBA) often are best bets thanks to generous repayment terms and low loan rates. You’d be surprised at how available these loans are, too. Many entrepreneurs think they won’t qualify, only to turn out to be pleasantly surprised.

In any case, your goal is to avoid becoming stagnant and to always move ahead. I’ll leave you with another quote, this time by Victor Kiam, a former New England Patriots owner and president of Remington Products: “Even if you fall on your face, you’re still moving forward.”

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