• October 7, 2022

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If You Want The Largest Possible HECM Credit Line In The Years Ahead, Do You Take It Now Or Wait Until You Are Older?

I will assess this question for a homeowner of 62 with a house now worth $400,000 who has no current need to draw funds from a HECM but wants the largest …

Wherever you are in your business journey, funding remains a constant need. Your business may now be in a place where you are ready to grow and need new or additional funding options.

Before you even begin your search, it’s critical that you identify why you are seeking funding in the first place and to determine how the money will be spent. Whether it is equipment, paying off business debt, hiring new employees, or preparing for an emergency, you’re far more likely to be successful in securing funding with a clear reason in mind and spending plan.

Now that you have determined a reason for seeking funding, it’s time to take a moment to examine your current financial situation. Here are five things you check.

1. Personal and Business Credit: Before requesting more funding, assess both your personal or business credit with the three major credit rating agencies. You can usually request this information for free through Equifax, Experian, or TransUnion once per year.

2. Liquid Assets: Take stock of your available assets that you can use to invest in your business. It would be wise to meet with your accountant or financial planner to gain the most accurate assessment of your financial situation.

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3. Collateral: Evaluate any collateral you may have, such as your car, property, and checking and savings accounts. Many times, lenders request collateral to ensure that you’re a serious borrower and can pay back the loan. Again, consult with your accountant or financial advisor for the most accurate advice for your financial situation.

4. Personal and Business Debt: Assess any personal or business debt you may have. This includes student loans, mortgages, car loans, etc.

5. Business Valuation: Depending on the situation, you may consider a business valuation. Some investors may want to see one before even considering giving your business money. A business valuation in the simplest of terms is a process to determine the economic value of your business. This process, regardless of the size of your business, usually involves a full and objective assessment of every piece of your business. This includes equipment, inventory, property, liquid assets, and anything else of economic value that your business owns. Your management structure, number of employees, revenue, and projected revenue may come into play as well. Be sure to consult your financial team before beginning a business valuation.

Once you make these assessments, the next step will be seeking funding. However, doing this work on the front end will place you on better footing as you do.

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