Tracy & Tracy Books               
Tips, Tidbits, & Tasks


I want to thank you for visiting our website, designed specifically to assist small and medium sized businesses with improving the management and performance of your business. Since this represents our inaugural launch of the website, I first wanted to take a moment to explain this section of the website entitled “Tips, Tidbits, and Tasks”. The basic premise of this section is very simple in that it is designed to provide quick, simple, and easy to understand ideas and concepts on critical business issues impacting businesses in today’s challenging economic environment. And what would be no better of a topic to address in this environment than the following critical business management issue:

 Keys to Successfully Securing Debt Based Financing in Today’s Economy

It goes without saying that securing debt based financing in today’s economic climate is extremely challenging. However, loans are available to qualified businesses from varying sources. So here are some tips you should remember when obtaining debt based financing in today’s environment:

1.)    Be a good Boy Scout and “Be Prepared”. Your financial and accounting records need to be in excellent shape when presenting to external parties. In addition, you should have a well developed business plan, updated financial projections, key management resumes, etc., etc., etc. available for the financing source. Establishing credibility has never been more important than today.

2.)    The Bank, the new four letter word. If you’re approaching a traditional bank, remember these three critical underwriting rules. First, your business must be able to demonstrate profitability at least the EBITDA level. Second, quality collateral must be offered as security. And third, secondary repayment sources to secure the loan must be offered. If you don’t qualify, then there’s no since in beating a dead horse so be prepared to look to the secondary lender market.

3.)    Keep your options open. The secondary lender market including asset based lenders, factoring organizations, government sponsored programs, equipment leasing companies, etc. all are active in the lending markets and have debt available. Basically the trade off with these groups is simple. The cost of the debt and management reporting will be higher but then again, so is the risk these lenders are taking on.

4.)    Remember, liquidity reigns king: In the past, interest rates and loan fees tended to be the driving force in securing debt. The goal in negotiating the loan was simple in that rates and fees were driven down as low as possible. Not so today as maximizing liquidity in the lending facility should be the top priority. So what if you pay an extra point on the money if it ties up all of your assets. The key is to structure a lending facility which maximizes available liquidity against the assets secured by the debt.

 5.)    Be Persistent: In the not so distant past, it use to be that approaching more than three financing sources was a sign of potential weakness as the market viewed you as “Shopping the Deal”. Not so today given the fact that so many lending sources have been eliminated and lending programs curtailed. Leveraging every contact and referral is critical to making sure your business finds the right lending partner.

If I can emphasize anything it is this – Business and Management Credibility. Lending sources have so many deals being presented and such limited capital resources that to a certain degree, they can simply cherry pick the best deals. Duke from City Slickers II hit the nail on the head when noted that the secret to life (his brother Curly referenced in the first movie) was “Honesty and Integrity”. Even if the financial community doesn’t adhere to this standard you should.


Please feel free to contact me at with any comments, questions, and/or to identify a topic that you would like further information on.