TORONTO FINANCING & BANKING LAWYER

Given the reality that inadequate or ill-timed financing is a highly common impetus for business failure, it is essential that you understand the challenges associated with financing and banking, in addition to retaining the services of the appropriate professional advisors. Whether you are starting a business or expanding one, sufficient ready capital is essential. But it is not enough to simply have sufficient financing; knowledge and planning are required to manage it well. These qualities ensure that business entrepreneurs avoid common mistakes like securing the wrong type of financing, miscalculating the amount required, or underestimating the cost of borrowing money.

Before inquiring about financing, you should ask yourself the following questions:

• Do you need more capital or can you manage existing cash flow more effectively?

• How do you define your need? Do you need money to expand or as a cushion against risk?

• How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money under pressure.

• How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives.

• In what state of development is the business? Needs are most critical during transitional stages.

• For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.

• What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.

• Is your business seasonal or cyclical? Seasonal needs for financing generally are short term. Loans advanced for cyclical industries such as construction are designed to support a business through depressed periods.

• How strong is your management team? Management is the most important element assessed by money sources.

• How does your need for financing integrate with your business plan? If you don't have a business plan, make writing one your first priority. All capital sources will want to see your business plan for the start-up and growth of your business.

To retain the legal services of Toronto business lawyer Christopher Neufeld, contact Neufeld Legal Professional Corporation at 416-887-9702 or Chris@LawyerTorontoBusiness.com.