CFOs Don't Know What They Don't Know: Harnessing the New Rules of Funding for Corporate Credit Sourcing
According to a recent report from Deloitte CFO Services, 13 percent of chief financial officers changed jobs last year. Although this was down from 18 percent the prior year, Deloitte's CFO Programs predicts CFO turnover will rise again this year.
I interface with CFOs on a daily basis to help them access funding and I agree that the turnover for this position is growing - especially for CFOs who do not know corporate credit sourcing well.
Turnover at the CFO level is one of the highest of any executive position. And lack of the "new rules of funding" comprehension can make or break a CFO's success as they transition into a long-term role at an organization.
When it Comes to the New Rules of Funding, Most CFOs Don't Know What They Don't Know - Especially When Transitioning into a New Position
A CFO has a number of important and complex roles to fulfill within the company with regard to reporting, analysis, and forecasting during a transition to a new CFO.
Another important area of responsibility, especially critical now due to the radically changing landscape in the financial markets, is corporate credit sourcing. In the old rules of funding, a few key relationships with banks was sufficient for the CFO to arrange optimal financing for their companies.
Now many of those relationships are with banks that are in trouble or not lending in the same way they did in the past. In addition to the added burden CFO’s find now within their companies due to recession-bred financial stress, they are also faced with sourcing new capital and lines of credit in an increasingly unfamiliar lending environment.
CFOs Must Think Outside of the Bankable Box
Their lack of comprehension of new options and alternative financing strategies can make or break their transition. To successfully transition into a CFO role, they must understand how to source new capital and lines of credit and NOT go it alone (they need specialized financially advisory to effectively harness the new rules of funding).
The old rules of funding are just not cutting it anymore in this new economy. It's more important than ever for CFOs to seek financing outside the normal lending parameters and know when to turn to private investment banks who are readily available to help businesses secure financing for appropriate working and growth capital.
Harnessing the New Rules of Funding
Rather than relying on traditional bank officer relationships that worked well in the past, CFO’s need to develop relationships with appropriate investment bankers and advisors to help navigate the new uncertain finance area.
If a CFO tries to go it alone they risk major deal errors and outrageous expenses based on inexperience. Information and sources of funding that could take the CFO weeks or even months to discover, many times are available readily from advisors.
Efficient outsourcing and advisory can save tremendous time and almost inevitably results in maximum leverage and or lower costs. By having a reliable advisory source for obtaining new lines of credit or refinancing, an understandably complex transition to a new CFO can be very smooth and efficient, at least in this area.
To learn more about how your business can secure the funding it needs, visit US Capital Partners, Inc. at http://www.uscapitalpartners.net/ or call (415) 882-7160.