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
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SBA Loan Incentives Reauthorized for Another Month

On February 23 in our post “SBA Starts Waiting List for Small Businesses Seeking Loan Breaks,” we wrote about the Small Business Administration’s announcement that it had run out of money to fund its stimulus package small business loan incentives – 7(a) and loan fee reductions. After the advancement of a $15 billion jobs bill the following week in the Senate with no appropriation for the loan incentives, the future of these programs seemed to be doomed.

However on Monday, the Senate passed the temporary jobs bill, which includes a brief extension of the provisions for the Small Business Administration’s loan incentives. It reauthorizes the 90% guarantee on SBA loans through March 28, with an appropriation of $60 million to fund the incentives. On Tuesday, the legislation was signed into law by President Obama.

While the reauthorization may be a welcome reprieve for many small business owners who had been put on the SBA’s waiting list and may now have the opportunity to gain access to much needed capital, the fate of the SBA incentive programs past the end of the month is unclear.

By: Present Value

Tags: 7(a), economic stimulus package, loans, SBA, Small Business Administration, small business loan incentives
Posted in SBA, Small Business Administration, small business | No Comments »