division of economic development loan programs michelle (miki) rodekohr loan/collection officer iii
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Division of Economic Development Loan ProgramsMichelle (Miki) Rodekohr Loan/Collection Officer III
Getting To The Top Takes Time
Page 2
PREPARATION…
BE PREPARED:
Is your loan application complete?
Include everything on the checklist.
If you‘re not sure, ask questions.
Have you signed in all places on all forms?
Don‘t forget the application fee!
Getting To The Top Takes Time
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Know What You Are Looking For:
Exactly what do you need loan funds for?
Do you have a WRITTEN business plan?
Starting a new business?
Expanding your small business?
HAVE A PRACTICAL PLAN…
Getting To The Top Takes Time
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CAPACITY - Measures a borrower‘s ability to repay a loan by comparing income against debt.
CONDITIONS - As interest rate and amount of principal will influence the lender‘s desire to finance the borrower.
CHARACTER - This refers to a borrower‘s reputation.
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THE “FIVE C’s” OF CREDIT…
CAPITAL - How much money will you invest into your project? 2
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4
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COLLATERAL - As property or large assets, helps secure the loan.
Getting To The Top Takes Time
Page 5
THE “FIVE C’s” OF CREDIT…
CAPACITY:
How do you intend to repay the loan?
Do you earn ENOUGH to repay the loan?
Is your income stable?
Is your cash flow seasonal or on a regular basis?
What is the probability of your income continuing?
DIVERSITY of income?
Getting To The Top Takes Time
Page 6
THE “FIVE C’s” OF CREDIT…
CAPITAL:
How much money will YOU invest in the project?
Do you have funds for down payment, closing costs?
Will you have money to fall back on?
Will you have funds left for living expenses?
Did you leave room for error?
Getting To The Top Takes Time
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THE “FIVE C’s” OF CREDIT…
COLLATERAL:
What will be security for the loan?
Loan amount will be based on a percentage of value.
Will you offer additional collateral if needed?
Loan term may be based on physical life of the collateral.
How easily can the collateral be sold?
Getting To The Top Takes Time
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THE “FIVE C’s” OF CREDIT…
CONDITIONS:
What is the overall condition of the economy or industry?
Does the plan for repayment reflect true conditions of business?
Is the market on the rise or falling?
Getting To The Top Takes Time
Page 9
THE “FIVE C’s” OF CREDIT…
CHARACTER - CREDIT:
Impression you make.
Do you pay your loans on time?
Do you have derogatory credit? Collections or judgments?
Education or experience in the industry?
Length of time at job and residence.
Are your IRS taxes filed and paid?
Getting To The Top Takes Time
Page 10
How much do you need to borrow? Be realistic.
DO YOUR RESEARCH – Are your projected income and expenses realistic?
If you can show savings track record, it greatly improves your position. Know what is on your credit report. If there are errors, ensure they are
corrected before your lender does its own check.
Equifax 800-685-1111 www.equifax.comExperian 888-397-3742 www.experian.comTransUnion 800-888-4213 www.transunion.com
TIPS…
Getting To The Top Takes Time
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If you have limited credit or are a first time borrower, consider using a guarantor. A guarantor underwrites the loan, may pledge collateral, and agrees to pay if the borrower is unable to meet repayments.
ASK QUESTIONS – Talk to successful folks in the business.
BE PREPARED TO WORK HARD!
TIPS CONTINUED…
Getting To The Top Takes Time
Page 12
Division of Economic Development Small Business Assistance Center http://commerce.state.ak.us/dnn/ded/DEV/SmallBusinessAssistanceCenter.aspx
Small Business Development Center http://aksbdc.org/
Small Business Administration http://www.sba.gov/
Alaska Business Development Center http://www.abdc.org/
BUSINESS RESOURCES…
DIVISION OF ECONOMIC DEVELOPMENT
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OFFICES:
Anchorage: Atwood Building (downtown)Juneau: Vintage Park in the Valley
1-800-478-LOAN
Please visit us at:https://www.commerce.alaska.gov/web/ded/
for information, loan applications and news
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And…One more REMINDER!
GETTING TO THE TOP TAKES TIME!
Page 15
Do You Have Any Questions?
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