small business loans kim pope, vice president, regional manager business banking group
TRANSCRIPT
![Page 1: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/1.jpg)
Small Business Loans
Kim Pope, Vice President, Regional ManagerBusiness Banking Group
![Page 2: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/2.jpg)
2
The Foundations of a Business
What type of legal entity will you be?
How many owners involved?
Do you have a building? Will real estate be involved?
Identify your market, mission statement
Register with the state and professional board(s) if applicable
![Page 3: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/3.jpg)
3
Key to a Successful Start-up
Raising Capital - basic of all business activities
Can you handle a few bad months to start?
Develop a banking relationship
Develop a financial reporting system (balance sheet & P&L)
![Page 4: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/4.jpg)
4
Business Financing Options
Personal savings
Personal borrowing
Friends & family
Credit cards
Business borrowing
![Page 5: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/5.jpg)
5
Personal Savings
Personal Savings - primary source of capital for new businesses
Look to your assets for opportunity• 401K• whole life insurance• etc.
![Page 6: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/6.jpg)
6
Borrow Against Your Home
Refinance your existing mortgage with a new one
Take out a line of credit against equity in your home
![Page 7: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/7.jpg)
7
Friends and Family
Get an agreement in writing
Emphasize debt (loan) rather than equity (ownership)
Pay back nominal interest at regular intervals (quarterly)
![Page 8: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/8.jpg)
8
Credit Cards
Quick and easy
Keep borrowings separate from personal use (separate card for the business)
Can be inexpensive and flexible when considering monthly payments
![Page 9: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/9.jpg)
9
Business Borrowing
Do your homework – be prepared!
Know your business: balance sheet income statement (profit & loss) seasonality
We want to understand your business
![Page 10: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/10.jpg)
10
Applying For a Business LoanGeneral Information
Business name, legal structure of business, and names and SS# of principals
Purpose of loan - what loan is being used for and why it is needed
Amount required - the amount you need to achieve your purpose
![Page 11: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/11.jpg)
11
Applying For a Business LoanManagement Profile
Short statement on each principal in your business
Provide background
Education
Experience, skills and accomplishments
![Page 12: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/12.jpg)
12
Applying For a Business LoanMarket Information
Clearly define your company’s market
Identify your competition and explain how your business will compete in the marketplace
Profile your customers and explain how your business will satisfy their needs
![Page 13: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/13.jpg)
13
Applying For a Business LoanFinancial Statements
Personal tax returns (2 years)
Business tax returns (2 years)
Interim financial statements (as needed)• balance sheet• income statement
Personal Financial Statements – PFS (as needed)
![Page 14: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/14.jpg)
14
How Will Your Loan Be Evaluated?
The Five “C’s” of Credit
![Page 15: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/15.jpg)
15
Five “C’s” of Credit
Character (credit history):
Will look at personal and business credit report to look at repayment trends
• Do you pay your bills?• Do you pay your bills on time?• Are there explanations for any blemishes?
![Page 16: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/16.jpg)
16
Five “C’s” of Credit
Cash Flow:
Historical and projected cash flow analysis to determine if you will be able to repay loan and have enough money to run the business
![Page 17: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/17.jpg)
17
Five “C’s” of Credit
Collateral (an asset, something you own):
A lender can claim to satisfy a loan in the event the loan is not repaid according to required terms
Assets purchased with loan proceeds may serve as collateral
If business does not have enough collateral - the bank will look to personal assets
![Page 18: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/18.jpg)
18
Five “C’s” of Credit
Capitalization (basic resources of the company):
Owner Equity
Retained Earnings
Fixed Assets
![Page 19: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/19.jpg)
19
Five “C’s” of Credit
Conditions (factors that affect the success of the company):
Government regulations
Competition
Industry Trends
![Page 20: Small Business Loans Kim Pope, Vice President, Regional Manager Business Banking Group](https://reader030.vdocument.in/reader030/viewer/2022032802/56649e105503460f94afc4f9/html5/thumbnails/20.jpg)
20
Make it Happen!
Resources are available to help you:
Professional service partners:• your local banker• your accountant/CPA
Business counseling organizations:• SBA• Small Business Development Center• Center for Women’s Business Advancement
• SCORE