Corporate Finance Solutions 10 Secrets Of Corporate Finance Fundamentals To Accelerate The Growth Of

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by: Dr Mark Yates Total views: 0 Word Count: 1234 Date: Sat, 23 Jan 2010 Time: 11:04 AM 0 comments

It's no great secret that obtaining business finance has never been tougher than during this economic downturn.

In the current recession smart business owners looking for growth in business understand the key to achieving company growth is ensuring your corporate finance solutions are adequate to fuel a growth business.

Basic corporate finance fundamentals are foundation blocks for the growth of business. Any growth for business strategy should identify the corporate finance solution because the fundamentals of corporate finance form the key to success.

The following 10 Secrets Of Corporate Finance Fundamentals will highlight the various methods of obtaining business financial support for managing directors seeking exponential business growth.

Corporate Finance Fundamentals Finding The Money #1 Cash Flow

The fundamentals of corporate finance indicate that cash flow is by far the best corporate finance solution. When considering growth for business, cash flow is generally the cheapest of all the corporate finance solutions and its within your control by virtue of the fact it is your money.

Corporate Finance Fundamentals Finding The Money #2 Savings

Corporate finance practice dictates the second best finance option to fuel a growth business is your personal savings, especially if your business is a start up venture. Any growth in business will understand the need for adequate finance solutions.

Corporate Finance Fundamentals Finding The Money #3 Family & Friends

An ideal corporate finance solution to turbo charge a growth business often comes from the pockets of your family and friends, providing you demonstrate passion and a good knowledge of how you plan on achieving growth for business.

Frequently this corporate finance practice often comes with the added value of receiving this investment at no interest, or a low interest percentage repayment.

If a family member or friend recognises your potential growth of business then he or she may offer their investment for a lower equity stake than a professional investor.

Corporate Finance Fundamentals Finding The Money #4 Grants, Awards & Prizes

Other corporate finance solutions designed to aid growth of business include business grants, awards and/or business prizes. Very few business owners and managing directors capitalise on these fundamentals of corporate finance because they view the application process as too paperwork intensive.

In reality, winning a business grant, or business prize often adds credibility to your business and demonstrates you have a clear understanding of how to achieve growth in business.

Corporate Finance Fundamentals Finding The Money #5 Soft Loans & Seed Corn Funding

Another one of the corporate finance solutions to assist growth in business is a soft loan, or seed corn funding.

The fundamentals of corporate finance typically dictate that this corporate finance solution is typically offered through European funding or from successful entrepreneurs who have a burning desire to assist a fellow business owner to achieve a growth business.

When considering growth for business it is worth mentioning that this corporate finance practice is often cheaper than a commercial financial loan and frequently less risky.

Corporate Finance Fundamentals Finding The Money #6 Asset Finance

Asset finance is a popular corporate finance solution whereby a financial institution will provide you with corporate finance based on the value of assets owned by your business.

These assets include, but are not limited to any equipment like information technology machinery or plant and equipment.

Corporate finance solutions like asset finance can also help a growth business by offering your business up to 80% to 90% advance on your outstanding invoices.

This corporate finance practice is known as invoice discounting and/or factoring and exists to aid the growth of business.

Corporate Finance Fundamentals Finding The Money #7 Bank Overdraft

A bank overdraft is probably the best known of the fundamentals of corporate finance. Few business owners achieve any growth of business without having the emergency parachute of a bank overdraft.

Sadly this corporate finance solution often receives the most negative press reports when banks decide to withdraw the bank overdraft facility at short notice, and for frequently invalid reasons.

Withdrawing the bank overdraft often creates problems with the business cash flow, which in turn stifles the growth in business. All business owners and managing directors should understand the terms of their bank overdraft.

In summary you pay for what revenue you use, up to an agreed level and limit. Go over your limit and you will have to pay heavy financial penalties.

Corporate Finance Fundamentals Finding The Money #8 Bank Loans

When considering growth for business then just about every business owner considers some form of bank loan or loans. Banks offer short,mid and long term bank loans.

Just about all the major banks will seek some form of security from business owners to secure the loan. Another method of security required by the banks is what's known as Directors Guarantees.

Essentially this means the company directors personally guarantee to repay the loan if the business goes bust.

It's never been tougher for business owners seeking to receive a bank loan to achieve growth for business than during the current economic downturn.

However due to the abysmal performance by the banking community, green shoots are beginning to re-appear for business owners.

Bank loans are one of the basic fundamentals of corporate finance, so given the global shake up of the banking systems it is worth looking at some of the new online internet based banks when contemplating bank loans to aid growth of business.

Corporate Finance Fundamentals Finding The Money #9 Business Angels

Another business finance solution that is increasing in popularity is that of Business Angel financing. Business Angels consist of groups of individual entrepreneurs and philanthropists who are looking to invest in start up and existing businesses looking to achieve exponential and profitable growth in business.

Typically Business Angels invest anything from £10,000 to £250,000. It is not unusual for several Angels to band together when investing in a business seeking investment.

As far as business finance solutions go, many business owners favour the Business Angel route as many Angels bring added value to the money they are investing.

Frequently many Angels are prepared to offer their professional business acumen to help a growth business.

Corporate Finance Fundamentals Finding The Money #10 Private Equity

For many business owners seeking investment of £250,000 and above, then the business finance solution of choice is often private equity.

Many managing directors have been seduced by this business finance practice because private equity has produced lots of millionaires from business owners aggressively seeking growth in business.

Private equity is probably one of the better known company finance solutions designed to aid the growth of business. Despite this being one of the underpinning fundamentals of business finance, it can be a corporate minefield.

Sometimes a business owner's growth for business vision gets clouded by the burning desire to acquire private equity funding. Often adopting the maxim of taking one step backwards to take two steps forward is worth while before embarking on the private equity route.





About the Author

Dr. Mark D. Yates The International Business Guru & Growth Consultant grows businesses fast delivering exponential growth, increased turnover & profit margins. He delivers business support to small, medium & large businesses in 42 countries. To claim his FREE business case files e-mail him at drmarkdyates@aol.com


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