Financial Differences of Start-Ups/Small Businesses Versus Later Stage Companies

For a business to achieve success, there generally should be a plan that does incorporate many facets. One component is financial attainability. Small businesses have different financial challenges than larger businesses. For instance, the average time to achieve profitability for Small Businesses is 22 months. Because of their scale, Large Businesses typically do not achieve profitability for several years, though the timeframe is dependent on industry type. The above statistics indicate that the working capital of a Small Business needs to last longer than the average time period to become profitable.

For this reason, it is very important for Small Businesses to communicate their needs to a lender, such as GoKapital, so the lender can better assist the Business. In other words, articulating the business requirements along with a good plan will give the Business a greater opportunity to realize their goals. It is paramount that a Small Business seeks the advice of a experienced business lawyer in Virginia Beach to review their Lease agreement prior to signing.

As with any legal contract there are obligations and requirements in the Lease that have to be reviewed and articulated. As a Virginia Beach attorney I have seen the cases where the tenant agrees to terms that they may be unaware of. For example, I had a case where a business tenant signed a Lease and when they vacated their premises the Landlord was able to take possession of their security deposit for unpaid rent. In the Lease agreement there was a provision that allowed the Landlord to use the Connecticut security deposit for balance of their Lease term if the Tenant shipped the balance of the Lease term from our area. If the Landlord was unable to rent the area, the tenant would be responsible for the Rent for the remaining term. Hence, the tenant was fully liable for the remaining term of the Lease twice.

As a business attorney this is big concern as the client incurred legal fees that I believe are a result of this mistake. A Commercial Real Estate Lawyer could have avoided this predicament by reviewing the Lease prior to it being signed. Additionally, the business owner was not able to seek financing because of the debt incurred by the additional rent obligation. I highly recommend small businesses to work with a Commercial Real Estate lawyer to avoid these pitfalls. The unfortunate reality is that many small business owners do not have the cash available to afford the extra expense. However, GoKapital offers fast loan approval which makes your lawyers work more affordable when you have access to the financing to cover those expenses.