Lately I have seen several articles on business related websites praising the value of hiring a part-time CFO. So, I felt you may need a little reassurance.

For the past nine years I have provided higher level financial management to numerous clients. The two most recent clients have a full time CFO and I added more value because of my varied experience. Part of that “varied experience” that is so attractive to business owners is my ability to secure bank financing even in tough times like the present. Also, my experience in dealing with banks and knowing how they think ensures the likelihood of success.

Not every CFO will have the banking background that I do but don’t let that get in the way. Your CFO can get a great deal of assistance from my website, businessloanscores.com.

If you can find a good CFO, then the ROI will make sense. The comment “if you can find a good one” probably has raised the question “what criteria defines a good one?” I think the single most important attribute of an effective CFO is has he/she worked in three or more different industries. More is better certainly when assisting privately held companies.

Lastly, the CFO will be accustomed to preparing quarterly and annual operating plans. This is a big plus for you the client. I find business owners do not formally plan enough. In addition, I recommend you invest $14.95 to purchase the Financial Planning document on my site to ensure you and the CFO do the best job possible to plan the next 12 months of operations.

One of my former clients summed up the need for a CFO perfectly. During our initial meeting, I had to ask why they needed me when profits were so high. The managing partner said, “we know what we don’t know”. Another partner explained, “we don’t know what you know”.
His point was “a complete team is a winning team”!

I’ve heard terms like “Credit Crisis”, “Credit Crunch” and “Money Crunch” to describe the availability of business loans to small businesses. In this, the worst economy since the Great Depression, we are told routinely by the media that banks just aren’t lending to small businesses. We are also told by the Washington politicians that the bailout of big banks will free up lending to small businesses. Further, we all hear that the trillions of dollars for the stimulus package will make everyone feel better.

I don’t feel better. I feel disappointed, no mad, that “my government” is spending future tax dollars today on bailouts and overspending stimulus initiatives. If this is the only knife Washington’s got in the kitchen drawer, then I have a forecast for you. This current spending “fix” will create a mountain of debt that our great-grandchildren will face when they become taxpayers.

Our current economy was not designed piece by piece by an economist or a group of them. The system we all have come to love and live with is a concept, a dream, a desire and a mysterious machine that was unleashed many years ago. Consequently, if its motion or momentum is disturbed, good and bad things will happen. If our system could be channeled in one path by the likes of bailouts, overspending and changing interest rates, then why weren’t the same practices used during the oil and dotcom busts?

If you read the “About” page, then you know that I got started in the small business loan service in Houston, Texas in 1991. For those of you who were not business owners then, let me briefly describe small business lending. Personal and business credit scores had to be near perfect, including those of your spouse. The company had to be in good financial shape; i.e., financial ratios had to meet specific standards, after tax cash flow had to more than cover debt service, liquidated collateral value of pledged assets had to equal or exceed secured debt and so on. And all this had to be demonstrated in historical financial statements. Is this starting to sound familiar?

None of the banks back then cared much about business plans, forecasts or budgets that related to future periods. If the company couldn’t handle the future/requested debt over the previous three years, then you didn’t get the loan…period. Business start-ups had no chance other than a SBA Guarantee and it was difficult to find a bank that would submit a start-up application. National banks would not give small business owners the time of day. It was as if “Small Businesses Not Welcomed Here” was painted on the front door. Sounding more familiar now?

As for SBA loans, only three banks in Houston were interested. All three were small community banks. The rest of the small banks stuck to retail lending rather than small business lending. And you know what? I never heard the term “Credit Crisis” once.

Let’s fast-forward to 2009 and the current credit crisis. Recently I met with a bank support lender. A bank support lender or Banker’s Bank provides funding to small banks when the member bank desires to make a loan to one customer and the amount is in excess of their lending limit. Other back office services are also provided to member banks. This particular Bankers Bank has over 350 member banks in its network. I left the meeting convinced we are back in the early ‘90’s again. They said, “We are tightening credit criteria”. What this means to small business owners is that you must clean up your personal and business credit, get current with suppliers (60 days or less), raise liquidity ratios, reduce owners’ bonuses, prepare monthly financial statements, and improve all the financial criteria mentioned in paragraph 4 above. If everyone else is tightening up, no reason why you shouldn’t.

Like you, I too read stories about established small businesses trying to grow or maintain status quo and are rejected time and time again. I can only assume that these business owners were not around in the ‘90’s. Clearly, business owners need help from an advisor who worked through the ‘90’s. You need Business Loan Scores© and all the other tools available on the website.

Today there are still banks out there with money to lend to small businesses with sound financial statements. Fortunately, you have found that advisor who did survive the ‘90’s and with the use of Business Loan Scores© will give you an edge up on those business owners attempting to borrow without experienced help.