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CNBC Squawk Box: Sen. Warren Leads Charge to Break Up Big Banks
Senator John McCain and Elizabeth Warren are teaming up to break up the megabanks. Massachusetts Senator Elizabeth Warren joined the Squawk Box team on Friday, July 12th to discuss this new bill.
Financing your Family Business without Going Broke
Financing is indispensable for the success and growth of your family business. But after you’ve already tapped out your personal funds, and perhaps those of friends or other family members to get your business up and going, you’re going to have to find a way to keep the lights on without going broke.
That means you’re going to have to borrow money or obtain credit from a variety of institutional lenders. Business loans and lines of credit will allow you to cover expenses, buy new equipment, manage cash flow, purchase inventory, create new products or services, or expand your business when the circumstances are right.
If your business is new and doesn’t have an established credit history, you may need to provide collateral to secure a loan or credit line. This could be any personal assets that you cannot otherwise monetize or afford to spend on the business, but can be utilized as security. Your best bet would be to approach a local bank or credit union where you have a personal relationship and a history of sound money management.
If your business does have a positive credit history for at least a year or two, the commercial bank that issued your business credit card is a good place to go to apply for a line of credit. Make sure that you’ve paid the balance on that card promptly each month, and if necessary, let the bank know that you’ve been shopping around and intend to move any accounts to the lender that can provide credit with the best terms. Most banks will want to keep you as a customer.
Regardless of the age or reputation of your family business, or where you go for financing, you’re going to have to prove to every lender that it is a financially solid concern, with the capability of long-term survival. So make sure you have all your paperwork in order, including all financial and tax statements, all profit and loss history, as well as a list of contacts for credit references.
You’ll also need to provide a pro forma to each potential lender. This will be a description of how you intend to utilize your loan or line of credit, how it will affect your cash flow, and how you anticipate paying back the money you’re going to borrow.
Once you’ve secured funding, make sure you stick religiously to a repayment schedule. As you continue to display credit worthiness, you will be able to increase your credit limit, borrow at more favorable rates, and most important, keep the business going without going broke.
Al Krulick is an award-winning journalist with dozens of years of writing experience. He writes and blogs for Debt.org.
Shark Tank: Meet the Sharks at Babson
ABC Television Shark Tank Hosts/Entrepreneurs Daymond John & Mark Cuban visited Babson College Tuesday, November 29th.
The entrepreneurs held a Meet The Sharks event with Babson student businesses True Intentions and Spy Games as well as participated in a Q&A with the student audience.
Daymond John is the Entrepreneur-in-Residence at Babson College 2011-2012. Daymond’s creative vision helped revolutionize the sportswear industry in the 1990s. As founder, president and chief executive officer of FUBU—”For Us, By Us”—Daymond created distinctive and fashionable sportswear and a host of other related gear. FUBU’s phenomenal success made mainstream apparel companies realize the potential for fashionable sportswear that appeals not just to trendsetting urban youth, but to mainstream teens as well.
Mark Cuban is the highly successful entrepreneur and investor who founded HDNet, Broadcast.com and MicroSolutions. He has also been an investor in startups, including Mahalo, JungleCents.com, motionloft.com, Filesanywhere.com, Naked Pizza and 140Fire.com. Mark may be best known for his purchase of the Dallas Mavericks on January 4, 2000. Under his leadership, the team’s home games have become a total entertainment experience. Despite initial criticism, he added much more to the usual game-day experience by introducing original video content, advanced technology and unique entertainment options like the Mavericks ManiAACs. His successful efforts have brought a sense of pride and passion to the fans.