FINANCING GROWTH AND EXPANSION
For more than 25 years L. P. Grasso & Company, Inc. has helped business owners identify, qualify and secure other financial alternatives, traditional and non traditional financing, for growth, expansion and acquisitions.

All the best efforts to carefully select and negotiate a transaction with an acquisition target, or to develop a killer idea for a new product line, are worthless without the money to make it happen.

A realistic assessment of the investment profile of the business and its credit worthiness is the first step to identifying how to grow and expand. Business owners usually view their resources as the total of whatever personal assets they have invested into the business and a total of loans the local bank is willing to provide. Businesses, just like people, have a lifecycle and each stage offers different financing opportunities. For example, is the business a startup, developing or mature? How appealing is the business and the way it is conducted to potential investors? How much capital is needed? Can the owner’s personal resources cover what is required? Are there family members or friends who can fill the difference between what is available and what is required? Can reducing expenditures eliminate the need for more funding?

L. P. Grasso & Company, Inc. provides the business owner with honest, specific and succinct answers to these tough questions. In addition, Grasso & Company presents historical and financial data to funding sources that formats the detailed information they require in a clear, concise, comprehensive and coherent manner.

The search for funding does not have a roadmap. It provide significant risks to investors and creditors. Shortcomings tend to be exaggerated. This requires that each negative be offset with a compensating advantage. The task of the business owner is to present the most attractive overall picture of their business by emphasizing its strong points and explaining its weaker traits.

Most funding sources require specific financial statements and a business plan from the business owner before they decide to invest in the business. While the plan should present the feasibility and goals of the business, it must also communicate the owner’s knowledge and ability to implement the business. Those reading the plan are in the business of making and lending money. The plan must sell the ideas clearly and convincingly.

Typically, business financing is available in two basic types, debt financing and equity financing. Each type offers different opportunities for raising funds. Business owners must maintain an acceptable ratio between debt and equity financing. Lenders use the debt-to-equity ratio to measure the amount of assets available to repay the debt in case of default. The ratio also helps lenders determine if a company is being operated in a sensible and credit worthy manner.

Debt financing involves borrowing money that is repaid over time, almost always with interest. Short-term financing usually requires repayment in less than one year. When repayment takes more than a year it is referred to as long term financing. There is no transfer of ownership, interest and repayment of the loan is the only obligation. Business owners should expect to provide personal guarantees as a requirement. As a result, commercial debt financing becomes personal debt financing.

Equity financing is an exchange of money for a portion of business ownership. The financing occurs without the obligation or the requirement to repay a specific amount within a particular timeframe. Identifying internal or external investors willing and able to put their money into a business is the most difficult hurdle to equity financing. Business owners must decide the extent to which they are willing to share management control since equity financing dilutes ownership interests and could result in the loss of autonomy and management rights.

L. P. Grasso & Company, Inc. has consistently and successfully identified the most suitable financing sources and helped business owners develop the most reasonable, practical and feasible financial package. Long-standing relationships with traditional and non traditional financing institutions and organizations provide a wide variety of alternatives. Each business has different financing options and a different agenda for the use of funds. Working with business owners we help match the best available option with the most appropriate lending source.