How to Keep Your Business Financeable When Things Go Wrong

Business gets weird.

Revenue dips. A marketing campaign flops. A huge contract lands before you have the cash to fulfill it. A financing decision that looked manageable six months ago suddenly starts eating your bank account for breakfast.

And when that happens, business owners tend to focus on one question:

Can I still get financing?

Sometimes, yes.

Because lenders aren't only looking at whatever fire happens to be burning today. They're looking at the entire business.

We recently worked with two very different companies that are good examples of this. One had taken on expensive debt after a rough quarter. Another landed a massive project but didn't have enough working capital to get started.

Different problems. Same lesson:

The financial habits and assets you build before you need money can dramatically affect your options when things get messy.

Here are five that matter.

1. Protect Your Personal Credit

Yes, even when your business is doing millions in revenue, somebody may still care about your personal FICO.

Annoying? Perhaps.

Reality? Also yes.

One outdoor living manufacturer we worked with had experienced seasonality and a bad Q1 marketing stretch. Revenue fell, the company took on MCAs to bridge the gap, and eventually those payments started choking cash flow.

But the husband-and-wife owners had maintained excellent personal credit.

That mattered.

So did the developer in another recent deal. He had a 730 FICO, which strengthened his profile when he needed project financing for a major construction job.

Takeaway: Don't treat your personal credit like an old gym membership you forgot about. Protect it even when the business is healthy.

2. Build a Balance Sheet With Actual Stuff on It

Revenue is important.

But when financing gets complicated, lenders may also want to know what the business actually owns.

In the manufacturer's case, the company owned the warehouse where it operated. That commercial real estate became an important part of the financing picture when it was time to restructure the company's debt.

Ownership creates equity. Equity can create collateral. Collateral can create options.

This doesn't mean every business needs to run out tomorrow and buy a building because some guy on the internet said so.

It does mean business assets can become incredibly valuable when cash flow temporarily gets ugly.

3. Don't Ignore Your Accounts Receivable

Accounts receivable sometimes gets treated like accounting wallpaper.

"Yeah, yeah. Customers owe us money. Moving on."

Except strong AR can be a meaningful business asset.

The manufacturer still had substantial accounts receivable even while its MCA payments were creating cash flow problems. Combined with the company's real estate and strong borrower credit, that helped support a $5 million, five-year term loan that consolidated the MCA debt.

So keep your invoicing tight.

Know what's outstanding. Know how old it is. Know who's actually going to pay you.

Because "people owe us a bunch of money somewhere" is considerably less impressive than clean, collectible receivables.

4. Keep the Core Business Moving

This may be the biggest one.

The manufacturer had made a financing mistake.

But they kept selling.

The underlying business hadn't disappeared. Customers were still buying. AR was still being generated. There were still assets on the balance sheet.

There's an enormous difference between:

"Our financing structure is hurting the business."

and

"There isn't much business left to finance."

Bad debt doesn't automatically mean you have a bad company.

Sometimes the problem is the debt structure itself.

5. Your Track Record Can Be an Asset Too

Not everything valuable shows up on a balance sheet.

A general contractor and developer recently landed a $17 million townhouse project in Miami Beach but didn't have enough working capital available to get the job started.

Pretty good problem to have.

Still a problem.

One thing working in his favor was that he'd spent roughly 20 years in the industry and had built a strong reputation as an operator. That experience, along with strong personal credit, helped support the project-financing request.

In other words, your track record matters.

Do good work. Maintain relationships. Build a reputation. Keep your credit clean.

Because someday you may land an enormous opportunity and discover that congratulations are free, but payroll, materials, and subcontractors are strangely not.

Build Your Options Before You Need Them

Nobody plans for the quarter where revenue falls, debt gets expensive, or a massive new contract suddenly requires more cash than expected.

But you can build a business that has more options when those things happen.

Protect your credit.

Strengthen the balance sheet.

Manage your receivables.

Keep selling.

Build a track record people can trust.

Because the best time to make your business financeable isn't when you desperately need financing.

It's when you don't.