Think Defensively and Offensively

Staff Writer

As you prepare and plan for 2017, here are ten defensive and offensive financing strategies to consider.

DEFENSIVE

1 Have you reviewed the mix between your fixed rate and variable rate debt, the impact of rising interest rates on your P&L – and decided if you’re comfortable with it?

2 Do you have a line of credit in place for your business that is approximately 10-20 percent of your top line revenue or 90 percent of your average accounts receivables?

3 Have you reviewed any short-term amortizing debt and looked at pros / cons of amortizing it over a longer period?

4 Have you utilized your line of credit for capital investments in your business instead of working capital? If so have you considered terming out some of your line?

5 Have you reviewed any short-term amortizing debt and looked at pros / cons of amortizing it over a longer period?

OFFENSIVE

1 Have you looked at / reviewed the SBA to determine if you are taking maximum advantage of the program?

2 Have you reviewed if you are taking full advantage of trade discounts?

3 If you are renting your business location, have you done an analysis to consider the pros / cons of purchasing?

4 What is the stretch goal for your business in 2019? What do you need to invest in in order to meet these goals and have you considered your borrowing options to meet these goals?

5 Are you planning to exit or sell your business in the next 3, 5 or 10 years and considered what you need to do to maximize the value?

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