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E-Myth – “Why most small businesses don’t work & what to do about it”

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Virtual Accountant | Business Plan Executive Summary Financing Required

In order to obtain the financing that business owners desire says virtual accountant. They should get into the habit of putting the type of financing that they want. Directly into their executive summary.

An executive summary is the synopsis of their entire business plan. And the reason why it’s so important to put the financing requirements in here. Is because often this is the only section of a business plan people will read.

Even Bankers, financing companies, and high-level investors. Will often only read the executive summary of the business plan. Therefore, in order to ensure that business owners are not only getting the type of financing that they want. But the correct amounts, and even the interest rates and amortization periods they desire. They should put that information into the executive summary.

While business owners may not end up getting exactly the product, the interest and the amortization period that they want. however, virtual accountant says if they don’t ask, they will never get it. By putting it into the executive summary. Increases the chances of business owners getting exactly what they need.

This state’s how important having a business plan is. if entrepreneurs don’t have a business plan. Or if their business plan isn’t well thought out. It can definitely affect the kind of financing that they are able to get.

For example says virtual accountant. If an entrepreneur only puts the amount of money they want to borrow from the bank. They might get exactly the amount that they want. At an extremely high interest rate. Or at an amortization that is far too short for them to be able to pay off.

Or, a business owner will get the amount that they want to borrow from the bank. But it comes in the form of a mortgage, a Term Loan, a credit card instead of the line of credit they were hoping for. Therefore, business owners needs to be laser specific when putting into their business plan what financing they want.

One of the main reasons for this, is not just so that’s an entrepreneur can end up with what they need. But because quite often, what a business owner needs is several different financing products. They might need a mortgage for the real estates that they are buying. But then they also need credit cards to pay for materials from their supplier. But then they also might need a line of credit for leasehold improvements.

If a business owner simply States the amount of money that they want. They might not get it in the products that are going to allow them to do all of the things they need in business.

Therefore, business owners needs to ensure that not only are they putting the amount of financing that they require. But they are also putting in the terms that they would like to get, including interest and amortization. As well as the different products they need to have the amount that they are borrowing in.

By doing these things, an entrepreneur will be far more likely to get closer to exactly what they need to borrow in order to positively impact their business. So that they can grow.

Virtual Accountant | Business Plan Executive Summary Financing Required

Business owners need to understand how vital having a business plan is says virtual accountant. Not only are business owners who have business plans 50% more likely to succeed. This is according to a study done by Palo Alto, who manufactures software.

but also, if an entrepreneur is trying to obtain financing in their business. They are going to want to have a business plan. Because this is typically housed financial institutions determine if they are going to loan money to a business or not.

However, virtual accountant says not all business plans are created the same. Therefore, entrepreneurs needs to know what specifically to put in their business plan. In addition to where they need to put it. To ensure that not only are they getting the financing that they want. But the products, and the terms that they also need.

The first things that business owners should do, is understand the various products that banks have for loaning money to businesses. One of the most common ways of loaning money is with the term loan says virtual accountant. These are for assets specifically. Such as a vehicle, or getting a piece of Machinery needed in a business.

The second kind of product that a financial institution will offer businesses Is a mortgage. Mortgages are specifically for buildings, or land. And it’s very possible that an entrepreneur might have a mortgage for the lands that they buy says virtual accountant. But also, they will have a separate mortgage for the building that they put on it. Mortgages come with their own unique amortizations, and interest rates.

The Third Kind of product that’s a bank or financial institution will have available to loan money. Is called a line of credit. This is often referred to as the Holy Grail. Because they have some of the best terms to pay back the amounts that business owners are taking to grow their business. quite often says virtual accountant, business owners only have two pay back the interest, which gives them a lot of flexibility.

Finally, The Fourth Kind of products that banks will have to help loan money out. Is a credit card. Almost all businesses are going to need credit cards. Simply because in order to make purchases online, or with certain suppliers. They’re going to need to pay with a credit card, or give them a credit card number to have on file.

When entrepreneurs understand all of the different products that are available to them. They will be able to understand why they needs to include what type of product they are looking for in addition to the amount.

If a business owner does not specify. A bank might say that they are approved for the entire amount that they are asking for. But in the form of a term loan or a mortgage. And a business owner needs a credit card as well.

By learning these tips, virtual accountant says entrepreneurs will be more likely to get the financing that they need to grow their business.