By nature, all entrepreneurs pose a sizable risk to lenders – especially new business buyers who lack experience and collateral. But often times, the inability to secure funding has less to do with a business venture than with the way the venture was presented to lenders. This is especially true in a misunderstood industry like the medical transportation business. When you’re looking for financing to buy an ambulance company for sale, the pitch is everything.
Pitching an Unrefined Idea
Convincing a lender to take a chance on a business will never be a walk in the park. But it’s going to be absolutely impossible if you can’t clearly explain how and why purchasing an ambulance business is going to make money. Can you really blame banks, investors, and friends for being hesitant to take a gamble on your endeavor without knowing the probability of return? Taking the time to create a compelling business plan before making your pitch will pay off. You already know your business idea is valid – now it’s your job to convince lenders. Is it because of recent growth in demand for medical transportation? Is it because you’re acquiring an existing business with new vehicles, trained personnel, and a great customer base? If you want potential backers to take the time to consider your pitch, you owe them the courtesy of making it a good one.
Asking for the Moon
Sure, it would be convenient to get every dime you need for your investment in a single loan. But that’s probably not the most convenient strategy for your bank. Think of it from the lender’s point of view. If you’re new to the ambulance business, you probably have no history of business credit, no proven experience, and no significant assets to serve as collateral. In short, you’re all risk with no proof of reward. It never hurts to show investors you have faith in your venture by putting your own money on the line. Ideally, banks like to see an owner have at least a one-quarter stake in the business upfront. Meanwhile, seller financing can help close the gap.
Not Doing Your Homework
You may have the most well-prepared business plan in the world, but lenders aren’t going to bother reading it if you show up unprepared. All too often, hopeful business owners make the mistake of pitching to lenders without doing prior financial research. Make sure to get your ducks in a row before walking into the bank. Bring copies of your tax and credit records to prove that you’re a responsible borrower. Fix any errors on your credit report beforehand. Make an outline that indicates how the money will be repaid. Research shows that talking with a Small Business Administration specialist beforehand can significantly increase your chances of qualifying for funds.
When it comes to financing your purchase of an ambulance business for sale, there’s no such thing as too much preparation. Meanwhile, a medical transportation business broker can help lenders understand the value in your future ambulance business.