An already pretty tight lending environment has gotten even tighter in recent months. According to the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices, 46% of banks stated that they had tightened their lending standards somewhat. An additional 4.8% said they’d tightened their standards considerably.
By “tightening standards,” a bank may mean that it has stricter collateral requirements or more limited credit lines or loan amounts. Banks are responding to an uncertain economic environment and doing what they can to protect their future.
If you’re a CEO who is struggling to find financing for your business in the wake of ever-tougher bank standards, a virtual CFO can help your company in several ways.
A vCFO Can Facilitate Connections
Building relationships is the secret to business success. If your company doesn’t yet have a connection or relationship with a bank, it can be difficult to forge that connection on your own, especially in a tightened lending environment.
A virtual CFO can help to introduce you and your company to banks, allowing you to put your best foot forward and build a connection that can lead to a long-lasting lending relationship.
A vCFO Can Point You Towards Other Funding Sources
While debt financing is often the best option for businesses that what to grow, there are other sources of funding available. If your company is currently experiencing difficulty getting loans, a virtual CFO can help you explore other options. They may recommend working with investors and accepting equity financing. Just as the vCFO can introduce you to lenders, they can also act as facilitator and introduce you to investors who may be interested in what your business has to offer.
Crowdfunding can be another effective financing option. A vCFO can explain how it works to you and help you set up a campaign. They can also help you find contributors to your crowdfunding project.
A vCFO Can Help You Work With What You Have
It could be the case that your business doesn’t need to acquire additional funding, but needs to reevaluate its current finances. If your company doesn’t have an existing strategy or business plan, it can be challenging to see where you’re headed or what you need to do to continue thriving.
A vCFO will evaluate your business’s current financial situation. They’ll review your budget or help you create a budget if you don’t have one. They’ll make recommendations for reducing expenses or increasing your revenue. In some cases, a few small tweaks can be all it takes to survive today’s rocky lending environment and continue to grow.
New Direction Capital is a team of outsourced, virtual CFOs. We want to help your company navigate its business finances confidentially. Contact us today to learn more about what we can do to help your business weather today’s tougher lending storm so you can grow and reach your goals.
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