Struggling to secure working capital? You’re not alone. In this episode of Napkin Numbers, Scott Lundt and Rahsaan Freeman break down what it takes to make your company truly bankable. They dive into key financial ratios—leverage, liquidity, and coverage—that banks use to assess risk, and they highlight the importance of early planning and strong banking relationships.
Making Your Company Bankable: Tips for Accessing Working Capital
Whether you’re growing or preparing for an acquisition, this episode is packed with insights to help you navigate the financial landscape, position your business for success, and secure the funding you need.
Napkin Numbers Talking Points
[0:00] Understanding Bankability
- The hosts discuss the importance of making a company bankable and how it affects access to capital for business growth.
[0:43] Qualifying for Working Capital Loans
- Rahsaan explains the three key ratios that banks consider when underwriting working capital loans: leverage, liquidity, and coverage.
- Planning and budgeting are essential for securing capital.
[2:37] Having a Proactive Banker
- Scott emphasizes the importance of having a banker who understands and advocates for the business.
- A proactive relationship with a banker who takes the time to understand the business can make a significant difference in securing financing.
[3:50] Access to Capital as a Make-or-Break Factor
- The hosts highlight the critical role of access to capital in the success of businesses.
- Companies that manage capital well tend to grow in a manageable way, while those without access to capital may face closure.
[4:36] Conclusion and Takeaways
- The hosts summarize the key concepts of leverage, liquidity, and coverage.
- They emphasize the importance of planning and preparing the company for financial evaluation by financial institutions.
The business landscape is shifting rapidly, and opportunities for growth through acquisition are more abundant than ever. Freeman Lundt specializes in helping businesses navigate fluctuating valuations, leverage dropping interest rates, and capitalize on strategic acquisitions. If you’re ready to make your next big move in 2025, don’t wait—contact us today to discover how we can help you seize the moment and grow your business.
Freeman Lundt is here to help you plan your business’s growth, and exit from your business on your terms.
The #1 question of CEOs looking to grow or sell their business is always, what is my business worth? Don’t worry, we have a free, confidential, industry-leading tool for that! Please use our complimentary business evaluation calculator to determine your business’s worth.
