Funding

Identifying cost reductions, having efficient operations and improving cash flow seem simple and obvious. However, with all of the training, technology and information at our fingertips we continue to have companies that underperform and businesses fail.When we peel back the layers of the onion, I have learned there are several reasons that affect our decision-making process. I going to spend some time explaining the main elements that impact our decisions and add unnecessary costs and processes to our business.  Reasons of Unnecessary CostsLack of Time: It seems as though time is always short and today’s competitive market exacerbates the challenge of time. Sometimes we make decisions without the proper planning or analysis because we cannot get the information fast enough.Limits on Creative Thinking: It is human nature to rely on the old “tried and true” or jump at the first workable idea that presents itself. For many of us, the natural creativity enjoyed in our childhood has been pushed away due to formalized training and maturity. Creativity is a skill becomes a learned behavior and takes practice. I will discuss creativity in my next post.Lack of Information: We have unnecessary costs in our products and processes when we do not have all or the correct information. Are you effectively using today’s technology?Honest Wrong Beliefs: Well-intentioned as we believe ourselves to be, we often kill or self-veto good ideas just because we do not know any better. Will Rogers said, “It’s not ignorance that’s so bad, but all the things we know that ain’t so”. In 1903, Simon Newcomb said “Man shall never fly”.Temporary or Changing Circumstances: How often do we set up 100% inspection on process until we fix the problem and we are still doing it months later.Habits and Attitudes: Those behavioral patterns that become completely involuntary and the habitual though patterns called attitudes. Sometimes they create “opioneering” which adds unnecessary costs.Continuous Process Improvement methods are focused on helping us address reasons of unnecessary costs with a process. There are many tools that include value stream mapping, Kaizen workshops and value engineering/ value analysis.Is your business struggling financially, do you need more efficient processes, or do you want to have a culture of continuous process improvement? If so, I recommend you understand these methods and try the process in one area the business that needs to improve. I know you will like the results.

Unless you are a rare company that is self-funded, having enough funding with the right structure is critical to your success. For small to medium sized companies this can be a complicated and time intense process. Cash is the bloodline of a business and having enough cash is critical to keeping your business alive, reducing your stress and providing for your family and community. Very simply we are experts and guide you through the process. Most of our compensation is paid when you obtain the funding. The number of funding sources today are more than any other time. You can get money from banks, asset-based lenders, mezzanine financing, capital equipment financing or private equity. They have different fees, requirements, and structures. Understanding each of these takes time, knowledge and experience. We have experience and resources to help you determine the appropriate source and terms. These maybe some Funding Services you need: New supportive funding source: want to be sure your opportunity is framed correctly with funding sources to get best possible response Second opinion on commercial banking issue Certainty you have complete terms with current funding source and looking for peace of mind. Review current funding proposals from lenders Clarity on where your company stands with current bank A real-life example of success: As a CFO, I had experience working with banks and obtaining financing. I was leading the North American business of a publicly traded foreign company and they were focused on growing their North American footprint. I was tasked with securing a large bank loan without a parent company guarantee. I knew the funding process was going to be challenging and require the right fit with a lender. I reached out to a mentor and he recommended I talk with Mike Sweeney, who had been a banking executive with 35 years of experience and was now helping companies with their financing. He also suggested, I develop a banking pitch deck so I could go to multiple banks. As CFO, I was reluctant to contact Mike because, I felt working with banks was my job and although I had worked on pitch decks, they were never for banks. However, I was already working 60 -70 hours a week and did not know how I was going to find the time needed to talk to multiple banks. I could truly use the help and wisdom to guide me through the process. I reached out to Mike to discuss my needs and we came up with a plan. We secured the funding and Mike’s fee was fair, and most was paid when we received the funding. We used the following process: I created the bank pitch deck, with the funding we desired. Mike and I then identified (6) banks to contact. We contacted the banks and sent them the pitch decks and scheduled discussions. Mike reviewed the term sheets from (4) Banks and I handled the follow-up calls. Once we had clarity and revised term sheets; Mike made recommendations and we determined the finalist. Mike and I finished the negotiations and closed the deal. I worked with our lawyer to finalize the agreement. Mike and I learned we worked well together and had complimentary skills that would help small and medium sized companies obtain their funding, improve financial performance and reporting.   Whether you need help with the entire funding process or part of it we take the weight off your shoulders and give you time to focus on other priorities. You may be a company with full time CFO or without a CFO, we can assist you with the process.

There are times when carefully planned merchant capital advances (MCA) can help a business through a challenging time. The problem is many business owners become dependent on MCA’s and find their business in a deeper cash flow problem than when they started. They are paying back the MCA with daily ACH withdrawals, short payback periods and excessive costs. They struggle to get their business back on track and lack the understanding or support to figure a way out. Businesses dependent on MCA’s understand my comments. There are no quick fixes to reverse the process because the need for a MCA identifies a potential issue in the business. But with a solid business model, disciplined improvement plan, understanding financing options and relentless focus on sales the process can be reversed. There are more private lenders in the market than ever before funding small and medium businesses. A number of these lenders operate through a trusted network. They understand the problem of a business dependent on MCA’s and provide an interim financing solution. This allows the business to execute their improvement plan with more favorable payment terms and lower costs. Then once the business is back to health they can look at more traditional financing options. Terce Solutions LLC works with companies to develop the improvement plan and identify other potential financing options. Contact: jon@tercesolutions.com