Institutional Financing

Given that banks recently have been reluctant to make loans to businesses with stellar credit, businesses with poor business credit scores or start-ups have little chance of receiving a bank loan these days. In fact, studies have shown that fewer than 15% of start-up capital comes from banks. Luckily, there are ways to raise money other than by obtaining a bank loan, such as institutional financing. Institutional financing is capital that comes from institutions other than banks, such as credit unions, venture capitalists, and insurance companies.

One of the best ways to help ensure that your company will receive institutional financing is to be well-prepared for the decision. Work to increase your business credit scores by limiting your amount of debt and increasing your number of credit transactions; be able to prove your business’s growth potential; have a stellar business plan in place; and be prepared to tell a potential institutional lender your business’s current worth. 

By securing a certified business valuation, you can make institutional financers sure that the business valuation you give them is USPAP-complaint and meets the standards of the Society of Business Analysts (SBA).

By: Present Value 

Additional reading:

The Appraisal Foundation Announces 2010-2011 Edition of USPAP

The Pension Protection Act of 2006

Tags: Business Valuation, institutional financing, loans

This entry was posted on Tuesday, July 6th, 2010 at 10:17 pm and is filed under Business Valuation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.