A business finance consultant assists business owners with a variety of financial services. Consultants offer advice to people who are attempting to start new businesses and assist them in obtaining the necessary funding to cover the start-up costs. Prior to mergers, acquisitions, and other major events, large corporations hire consultants.
Lenders are typically hesitant to lend to new businesses because they lack a track record of profitability and a demonstrated ability to repay debts. As a result, many business owners rely on personal funds to cover startup costs, but a business finance consultant can assist a business owner in identifying alternative sources of funding. Some consultants work as brokers, negotiating deals with financial institutions and private equity firms. For arranging such deals, the consultant usually receives a commission from either the lender or the business owner.
Even when a business finance consultant is involved, some lenders are hesitant to lend money to new businesses. As a result, consultants assist business owners in locating investors willing to put money into the company in exchange for a share of ownership. Many consultants specialize in assisting companies that work in specific industries. Consultants who are familiar with a particular industry can provide clients with advice based on previous client interactions. These consultants also form strong industry connections, which allows them to help start-up businesses by generating referrals and encouraging business partners to collaborate and form mutually beneficial business relationships.
Before attempting to acquire another company, the board of directors of a major corporation usually consults with at least one business finance consultant. A consultant can provide information about the target company and assist the company in obtaining funding. When a privately held company is floated on the stock market, consultants seek out investors and provide prospective shareholders with information about the company in order to generate interest in the Initial Public Offering (IPO). If economic or industry conditions are not favorable, a business finance consultant may advise a company to postpone an IPO.
Business finance consultants also advise business owners, both large and small, on day-to-day issues that could affect their profitability, such as legislative changes or tax increases. Some companies hire full-time consultants, while others don’t hire in-house consultants and instead hire freelancers as needed. Consultants usually have a finance or accounting background. Many of them have college diplomas as well as industry-specific licenses and certifications.