Commercial Refinance
You might be a good leader and a very enterprising business entrepreneur. For every business operation, finance professionals advice and guidance is a must no matter where you strengths lie whether in marketing, production or elsewhere. There is no question of any business growing without adequate finances in place.Any and every business necessarily is financed by the banks and other financial institutions.At every stage of growth the business requires primary input in the form financial investment. When you take a loan and start making repayments regularly you might be tempted to say that you find yourself struggling and paying all the money to your bank instead of enjoying the same.
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You can consider your banker to be your partner in business. Normally you will need to submit a good business proposal and chase to the bankers to consider your application for grant of loans. Armed with a strong business proposal you could speak to several banks and submit your applications for loans. Banks provide you with a loan to help purchase and set up the plant and machinery. Banks normally insist on the promoter?s to bring in a part of their investments into the project as per pre approved rate of interest.
Besides the capital costs, you have other ongoing costs that you will incur with salaries, day to day expenses as well as raw materials that might be required to be purchased. With the help of working capital you will be able to purchase raw materials, do the selling as well as manage the other operational expenses until you realise the sales proceeds.Banks accordingly provide you with a working capital loan which is also called an Overdraft on the Current account. Depending upon your sales forecast as well as orders in the pipeline, the bank arrives at a maximum ceiling after taking into account the amount of inventory you are holding both in the form of raw material, semi finished goods as well as finished goods.
First one year after starting business you will need to focus on stabilizing operations. The next phase will need you to expand your operations and increase your targets to be able to maintain a healthy growth rate.Soon enough you might need to expand your product lines and build additional capacity too.This is when the bank will work out refinancing option on your overall loans.The bank would ask for a revised business proposal along with financial statements in detail.They might offer you additional loan or rework on the existing loan by increasing the financial exposure, redraft the tenure as well as the interest rates. As you grow bigger in your business and are ready to go on an expansion spree there are other finance sources like venture capital and share markets that you can tap. You have no option at this stage but to engage the services of a top class finance expert to manage your company and financial affairs and control funds flow too.
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