[00:00:00] Welcome to the Smart Credit experience, the place where financial clarity, strategy, and transformation begin. I'm your host, Geri Toliver, CEO of Smart Credit Solutions and the creator of the Smart Credit method. Every week, I break down the truth about credit, funding, and building a financially abundant life and business. So if you're ready to learn what lenders actually look for, how to build a fundable business, and how to move forward with confidence and clarity, you're in the right place.
[00:00:31] Mo money, mo problems. I've heard it before, you've heard it before, We've all heard it before.
[00:00:37] And, you know, when I was younger, I thought that this was just, you know, one of those catchy lyrics that you bob your head to. But after spending more than a decade helping entrepreneurs build fundable businesses, I can honestly tell you that there is a real lesson in this.
[00:00:52] And, you know, it's not that money or funding or capital is a bad thing.
[00:00:58] It's not that it just creates all these problems for you. The truth is, I love helping business owners get access to capital. I believe in it. I believe in business credit. I believe in SBA loans, I believe in lines of credit. I believe in using other people's money to grow your business.
[00:01:13] But I've also watched businesses get approved for hundreds of thousands of dollars and still end up closing their doors.
[00:01:23] So the problem isn't about getting.
[00:01:27] In fact, getting the money is the easiest part about all of this. And so the problem really is what happens after you get it. So that's what I want to talk to y' all about today. Because one of the biggest misconceptions in entrepreneurship is that funding solves all of your businesses problems. But I'm here to tell you that it doesn't. Funding instead, it creates opportunities. Now, whether those opportunities turn into growth or become expensive, mistakes depend entirely on how you manage your business.
[00:01:59] One thing that you've probably heard me say before is that growing a business sucks a lot of cash.
[00:02:07] Every stage of your business requires more money.
[00:02:10] So, you know, think about it. When you get more customers, you need more inventory, you need more staff, more software, more marketing, more systems, higher payroll, more insurance, more taxes.
[00:02:22] Everything legit gets more expensive.
[00:02:25] Now, don't get me wrong, growing a business, it's really exciting. You know, it's exciting to see your numbers going up. It's exciting to see customers coming in. But growing that business and funding that growth is really expensive. You know, think about it this way. I have a client that works a lot of, like, government contracts. And just recently, she landed a $300,000 project.
[00:02:51] $300,000. Now most people, they'll celebrate, you know, they'll be toasting, popping bottles of champagne. And they should, don't get me wrong, but what they don't see is that $80,000 or a hundred thousand dollars in expenses, right? Like this client, she got a 3,300 thousand dollar project, but she has to hire people, she has to get an equipment, she has to invest into servicing that contract.
[00:03:18] So by the time it's all said and done, she's going to come out of her pocket about a hundred thousand dollars and she'll finish the project. And then she still has to wait 60 days before she gets paid. And so in other words, she has to carry and foot these expenses by herself until the project is done and she collects a check.
[00:03:43] Now, you know, as you can see, that can create a lot of chaos in most businesses, right? Like waiting 60 days to get paid and spending up to $100,000 just to get paid would turn a lot of people off. But that's why business funding exists.
[00:04:01] Because many healthy businesses, businesses that are doing very well, outgrow their cash.
[00:04:09] Happens all the time. And so what happens is they end up needing more capital, more working capital to fund the growth. And so there's a very important distinction that you should be aware of before you start borrowing money.
[00:04:27] And that you should know that just because you're borrowing money or you're looking for funding doesn't mean that your business is in trouble. It means that your business is moving to the next level. And that's what everybody wants, right? But the problem that I see normally is entrepreneurs get themselves into trouble. You know, they get approved for funding and then they start acting like they won the business game, like they're winning it. They've won and there's nothing else to do. I got this.
[00:04:57] They start posting screenshots on social media. I got a hundred thousand dollars approved, 250k. Everyone's celebrating, right? But nobody's asking what's the plan?
[00:05:07] Because once that money hits your account, that lender is expecting something. You know, you have obligations and you have responsibilities that are attached to this money, which means every single month your payment is due, whether the business is doing good, whether the business is slow, whether your marketing campaign actually worked, whether your biggest customer paid you or they stiffed you, the payment is still do. The lenders don't care. That's why I tell people, getting approved, it's not the finish line, it's legit the beginning. Because think about it. Funding your business isn't something that happens once.
[00:05:48] It's something that happens numerous times over the life of your business. And so the first time you get funded is the first time that you're accepting an opportunity. You're accepting the responsibility to deliver on your promises to build trust with bankers and lenders. Because over the years, I've noticed something very interesting, that money doesn't.
[00:06:18] It doesn't make business owners better.
[00:06:22] You know, it really just exposes who they already are. And so if you're disciplined, you know, if you're a disciplined business owner, funding gives you the ability to grow faster. If you're careless, funding allows you to make even more careless mistakes.
[00:06:38] You know, think about a bucket, right? Think about a bucket that has holes in it at the bottom.
[00:06:44] Most entrepreneurs think that they just need more water, that if they just pour more water, more water, faster water into the bucket, that the. The bucket's going to feel.
[00:06:58] But the problem isn't the water, right? The problem are the holes, the leaks. And businesses have leaks, too. Maybe you're overspending. Maybe you don't have a bookkeeper. Maybe your books are. Aren't even accurate. Maybe you don't even know your profit margins. Maybe you don't know that you're pricing your services and products too low.
[00:07:22] Maybe you're making emotional spending decisions instead of making strategic ones.
[00:07:28] Until those problems are fixed, more funding, more money is not going to solve those problems. It's literally just going to delay the consequences and the inevitable, which is business failure. Because you can't overspend and hope your way into success.
[00:07:48] And so here's a lesson that I wish every entrepreneur understood.
[00:07:55] That revenue and cash flow are not the same thing.
[00:08:01] You can legit have a business that's making $500,000 a year and still struggle to keep your lights on and pay your bills. I've seen it. I've seen it firsthand. You can also have a business that's making less revenue, not even clearing six figures, but still have plenty of cash in the bank available, because that money is well managed.
[00:08:26] Because it's not about how much money you make, it's about how much money you keep. That's why lenders don't just look at your sales.
[00:08:35] They look at your financial habits overall. Can you manage debt? Can you make payments consistently? Can your business generate enough cash flow to support its obligations?
[00:08:47] Those are the questions that lenders are asking themselves and the questions that actually matter.
[00:08:54] Because lenders aren't invested in excitement or hope or prayers. They're Invested in your ability to manage risk.
[00:09:06] That's what they're invested in. They're invested in your ability to be predictable.
[00:09:12] That's what they're invested in. So before you go trying to borrow some money, or if you've already borrowed some money, before you go borrow another dollar, I want you to slow down and I want you to ask yourself a few questions.
[00:09:27] First question you should ask yourself, what exactly am I using this money for?
[00:09:31] And don't say growth because growth is not a good answer. It's not even specific enough. You need to be specific. You need to be very specific about what you need this money for, what you're going to use it for. Second, how will this investment make my business stronger or, or more profitable?
[00:09:50] Now, I see a lot of business owners all the time that are racing their way to the bottom.
[00:09:56] They're racing to the bottom. They're trying to see, you know, how can I serve customers at the cheapest rate.
[00:10:03] Business owners, as a business owner, as an entrepreneur, your job is not to worry about affordability.
[00:10:11] Some of it it is, but most of it, if not all of your responsibility is revolving around being profitable.
[00:10:20] You all are. Most people are a for profit business.
[00:10:25] So your job is to make a profit, especially if you're trying to borrow money.
[00:10:31] Third question to ask yourself, how long will it take this investment to pay for itself?
[00:10:38] Fourth question, if sales drop by 30% next month, could you still comfortably afford to make the payments?
[00:10:52] And finally, what is my plan to pay this debt off?
[00:10:59] Let me tell you something. If you don't have answers to those questions, you're borrowing too soon.
[00:11:06] You need to have clear answers to these questions before you go filling out any applications or meeting with any bankers.
[00:11:15] Now, I don't want you to think that I'm discouraging you from getting funding. I don't want you to think that I'm discouraging you from getting capital or making you think that this is going to cause huge problems for you and your business.
[00:11:30] I just want you to be aware, I want you to avoid the very costly mistakes that entrepreneurs make when they start trying to get funding for their businesses. Because I mean, some of the most successful businesses in the world were used, were built using other people's money.
[00:11:49] So the key is making sure that every single dollar that you borrow has a purpose.
[00:11:56] And the purpose shouldn't be to help you catch up on your personal bills, to pay your mor. It shouldn't be that it should be dedicated to growing the business so that you can take care of Those things.
[00:12:10] Your business funding is not to save you from your personal problems.
[00:12:16] It's not there for that. It's there to help you grow your business. The vehicle that you decided to start so that you could have more freedom in your life, so that you can show up for the people that care about you, that love you, that count on you.
[00:12:30] That's what it's all about. Because when you, when you make sure that every dollar has a purpose, you, you then also make sure that your business has a plan, right? Because borrowing money to buy equipment that is going to increase your production is good. Borrowing money to hire employees because your demand is growing is great.
[00:12:56] Borrowing money to invest into marketing that has a proven return is amazing.
[00:13:03] Borrowing money to create new opportunities for your business, awesome.
[00:13:08] So don't borrow money just because it's there. There, there's plenty of money out here to borrow. There is no shortage on capital out here. Trust me.
[00:13:17] Access to capital is a privilege. You are not.
[00:13:22] What do you call it's a privilege? Okay? You're not entitled to funding. A bank doesn't have to say yes.
[00:13:32] What they have to do is make sure that you're qualified.
[00:13:37] So treat it like a privilege, treat it like it's a gift. Because it is.
[00:13:43] And so I'm gonna leave you with this.
[00:13:46] One of the biggest shifts that I had to make as an entrepreneur was realizing that success isn't measured by how much funding you could get approved for.
[00:13:57] When I first learned about funding, when I first learned about business credit and just how all this stuff worked, it was like a light just was shining so bright, like the light bulb was going off because I realized that, wow, like there's so much money out here, you know, I made it, I'm going to the promised land.
[00:14:21] But as I was getting all this funding, I realized that managing this amount of money is very different than managing credit on your personal side. On the, on your personal side, when you're managing credit, you know, you'll probably get approved for maybe a credit card with a ten thousand dollar limit, but on the business side, they're giving you higher limits. You're getting 30,000, 50,000, 80,000, a hundred thousand dollar lines of credit.
[00:14:49] And so it's not about just getting it, it's about what are you going to do with it, how are you going to manage it, how are you going to use the resources that you've already been given?
[00:15:00] Because truthfully, anybody can chase some approvals, right? Entrepreneurs who build lasting businesses though, they focus on stewardship, being good stewards.
[00:15:14] Of what they are given.
[00:15:15] Because don't expect to get more of something that you don't already appreciate.
[00:15:21] If you don't appreciate the funding, if you don't appreciate the opportunities, if you don't appreciate the privilege, then don't expect to get more of it. That's just law. It's a universal law.
[00:15:33] So, you know, at the end of the day, if you want to be a very successful entrepreneur that has a business that grows for years, you need to know, right? You need to know where every dollar is going. You need to know and understand your numbers. You need to know and plan where the money is going before you spend it.
[00:15:55] And when you borrow, it's because you've already decided exactly how that investment is going to help you get a return, how it's going to help you take yourself and your dream to the next level. The that is what being fundable is really all about. It's not just about qualifying for funding, but becoming the kind of business that knows exactly how to use it wisely. That's what it's really about.
[00:16:23] And so here's the deal, y'. All. I.
[00:16:26] I just want to say thank you for spending some time with me for a couple of minutes for this episode, and I hope that it gave you a new perspective on how to fund your business.
[00:16:37] And so with that in mind, I'd love to invite you to take our free Fundable quiz. It's a quick way to see your business, to see your business through more of a lender's eyes and then identify what you can improve before you go to a lender to get approved. Right. So I'm gonna leave a link in this.
[00:16:59] If some of y' all probably listening to this on our website. If so, I'm gonna leave a link below this. If you're. If you're listening any other platform like YouTube, I will also leave it in the description.
[00:17:09] And then if you want to take the quiz directly on our website, you can visit us
[email protected] and if you're ready to build a stronger financial future and foundation for your business, then I want to invite you to join us for our first steps of Fundable Workshop. This is going to be a live zoom workshop that we're going to conduct to teach you the systems, the strategies and the habits that'll help your business get not only funded, but it'll help you with actually managing it successfully and give you a plan and strategy on what to do with it. And so you can Visit
[email protected] FSTF that's first steps to fundable F S T F First steps of fundable smartcreditcoach.com FSTF and if you enjoyed today's episode, be sure to subscribe to the Smart Credit Experience. Leave us a review and share this episode with another entrepreneur who's focused on building their business. That last?
[00:18:16] Until next time. Keep building, keep learning. And remember, getting funding can help you grow your business.
[00:18:22] Learning how to manage that funding is what's going to keep your business alive.
