Unlock Your Business’s Potential: $1 Profit and 3 Pro Tips to Secure Capital

Are you tired of feeling stuck between a rock and a hard place when it comes to finding the right business loan? We get it. The pressure to show minimal profits for tax purposes can often clash with the need to demonstrate financial stability when seeking capital from banks.

But fear not! We’ve got three expert tips to help you navigate this tricky terrain and secure the capital your business needs to thrive:

Pro Tip #1: Foster Collaboration Between Your Banker and Accountant

Schedule a meeting between your banker and accountant to align your commercial loan goals and financial strategies. Sharing your latest loan and security agreement with both parties ensures everyone understands your financial performance covenants, providing invaluable insights that can strengthen your loan applications. This also helps your accountant become more strategic when it comes to tax planning and helping you get approved for a business loan.

Pro Tip #2: Aim for a Minimum of $1 Profit

While it may seem counterintuitive, showing even a small profit on your year-end P&L can significantly boost your chances of securing capital. Banks are more inclined to lend to profitable businesses, so work with your accountant to find creative ways to demonstrate at least $1 profit without sacrificing tax efficiency.

Make no mistake about it, EBITDA is important when it comes to adhering to your bank’s financial performance covenants and meeting your financial ratios. But these days when banks are tightening their credit standards, it’s best to demonstrate that you can operate a profitable business to maximize your chances of obtaining a commercial credit facility with a bank.

Pro Tip #3: Prepare Your Financial Documents in Advance

Don’t wait until the last minute to gather your financial documents for your lender. Having everything ready to go when discussing financing options demonstrates professionalism and expedites the underwriting process, increasing your chances of approval.

The ultimate goal is to get bank approval with the loan structure, capital availability, and cost of capital that compliments your business growth goals. But, what happens if you were told “NO” by your bank? You’d probably go to a few other banks, and what if they also said “NO”? Relax …There’s an incredible option with Green Zone!

At Green Zone Capital Advisors, we understand the complexities of capital financing. As former commercial lenders, we know what it takes to position your business for success with capital providers who are eager to provide non-dilutive capital financing to support your business growth. We have streamlined the entire capital process from A-Z, empowering you to make informed decisions about your capital needs with the right capital provider with the right structure and availability to support your growth.

Ready to take the next step and learn more about our powerful process? Complete our Capital Inquiry Form NOW, and let’s start a conversation about how we can support your business’s growth journey.