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Press Release 2004

Press Release March 31, 2004

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Press Release Source: Capital Management Group     

Capital Management Group Describes 5 Biggest Problems Businesses Face When Trying to Get Business Loans or Equities from $100,000 to $25,000,000
Wednesday March 31, 2:27 pm ET

ANAHEIM HILLS, Calif.--(BUSINESS WIRE)--March 31, 2004--Finding the capital needed to finance a business can be a confusing and complicated process. Many great ideas stumble at this stage of business building. Yet moving through this stage is critical for the success of a business/project. Finding money is just a matter of being informed and choosing the right path for business capital to start, expand or even exit the business. There are several options available when searching for financing. Some methods of raising funds are less difficult than others, but almost all require some planning, professional expertise or relevant experience.

  • 1. Lack of Planning: Sixty to 80 percent of all new businesses fail during their first five years. A key reason for this failure is due to lack of good planning. Only 10% of all business equity or loan proposals are accepted and funded. A good investment-grade business plan has proven to be critical to the success of a new or existing business. The better the plan, the better the chances of communicating to stakeholders and succeeding in getting the required funds and performance in time. Businesses need the right model.
  • 2. Too Many Hassles and Turn Around Time Too Long: Usually a business spends countless hours running around trying to obtain financing for projects and worrying about time-consuming packagingrequirements and dealing with inexperienced or new lenders,investors and investor meetings. Often a business will discover thebanks or investors have different or unreasonable  requirements from its point of view. Businesses need to do it right the first time.
  • 3. Lack of Administrative Assistance: Many small companies lack the administrative infrastructure that can impact regular efforts with the necessary expertise, and organize finance in time for settingup the project and working capital. In most cases, a company is stuck trying to gather information through its own efforts, as well as trying to run the business or current activities and maintain an excellent reputation. A business may need to outsource and must determine who can best finance a project.
  • 4. Hidden Costs: In a typical loan situation, there are always hidden costs involved. And most businesses are just not aware of certain upfront costs; it's even harder to swallow than actually paying the amount. These fees, along with basic administrative expenses, are necessary as the financing process often takes 8 to 16 weeks and involves collecting and presenting the relevant information by a team of professionals. Businesses need to present the right information the first time.
  • 5. Confusing Options: The traditional lending process with most business banks and lenders focuses on one thing -- get the application, send it to a committee for approval and give the answer: yes or no. It's a numbers game. The more applications they submit, the more loans they may approve. There is no one there who will look at other options available and assist a business in the process. There are a lot of confusing options in an environment of information overload. Businesses need to determine which option is right for them.

Capital Management Group
Ray Shah, 714-439-9600
www.cm-group.com   | Email

Source: Capital Management Group