How to Improve YOUR Chances of Getting $$$ for YOUR Business … · 4 Ways to Improve Your Chances...

How to Improve YOUR Chances of Getting $$$ for YOUR Business

SCORE

June 25, 2015

MONEY IS THE LIFELINE OF ANY BUSINESS, WHETHER YOUR BUSINESS IS:

o a Start up, or

o an Existing business

securing financing AND developing a banking relationship is a major factor in succeeding and

growing YOUR business

4 Ways to Improve Your Chances of Getting a Small Business Loan

1.Provide Detailed Information – YOU WILL NEED A BINDER

2.Seek Out Help from Not for Profits in the Economic Development Field to Help Create and Gather the Information You Will Need

3.Be Familiar with the Information You are Asked to Provide and Speak Confidently

4.The More the Merrier – Have a list of 5 Targeted Lenders -Think Local Banks/Credit Unions/Not for Profit Lenders

Basics that you Should Have in Your Binder

• Business Plan (including Cash Flow Projections and a Budget for how you are going to spend the Loan Proceeds)

• Organization “Set Up” Documents

• Two - Three Years Personal (and Business) Tax Returns

• 2-4 Months Bank Statements

• Interim Financial Statements if an existing Company

• Personal Financial Statements (showing assets and liabilities)

• Household Income and Expenses

Organizations that Can Help You• SBA www.sba.gov

• New York State Small Business Development Centers

• SCORE

• Small Business Advisory Alliance

• Procurement Technical Assistance Center

• Community Capital New York

• Women’s Enterprise Development Center

• WCC- Professional Development Center

• Westchester County Office of Economic Development

Be Familiar with the Information You are Asked to Provide and Speak

Confidently• Know your revenues – history and projections

• Know your margins

• Know your overhead

• Be familiar with cash flow management strategy

• Be truthful and open

• Know your personal credit score

• Know how much “skin” you have in the game

The More the Merrier

• Start with where you personally bank

• Think local and regional banks that have a vested interest in “local communities”

• Target Five Banks and “go in” to their local branch and see if you can find a contact

• Credit Unions – great source to consider

Some Alternatives to Bank Financing

• Not for Profit Lenders

• Family and Friends

• Home Equity Loan

• Selling Assets

• Angel Investors

• Venture Capitalists

• Crowd funding

• Beware of Credit Card Financing and On-Line Lenders

Family and Friends

• Choose your Financier carefully

• Be clear- is it a loan or a share in your business

• Have a Written Agreement in place – with a repayment plan

Angel Investment• High Net Worth Individuals- they want to invest in

Early Stage, High Potential Businesses

• Equity position and some management/decision making power/control

• Expect 20-25% return on investment

• Can serve as advisors-typically have some experience in your business type

• Usually invest $100K - $2 million

Venture Capital• Interested High Growth Stage Businesses

• High Return expectations/equity position

• Small Businesses beyond the Start-up phase- Have to have Revenue!!!!

• Quick Way to gain “millions” of dollars

• Provide professional expertise AND want management/decision making power/control

• Focus on specific industries - biotech, nanotechnology

• Beware - short leash - typically want to recover investment in 3-5 years

Bank Loans

• Micro-lenders - $1,000 - $50,000

• Personal or small business loans – thru Banks or Credit Unions – Think local

• SBA loans- administered thru Banks- 2 years in Business is typically required

– 7a- 10 year term

– 504- 25 year term

Crowd Funding• Defined as “The process of raising a large amount of

money in small increments from a large number of people to fund the capital needs of a cause, project or enterprise.”

• Targeted $ and Discrete Time Periods – “All or Nothing” OR “Keep What You Raise”

• Loan (www.kiva.org) or Reward (www.kickstarter.org)

• Getting some SEC attention

• Great for creative or other projects that tap into a crowd’s “passion”

Five “C’s” of Small Business Lending

• Character

• Credit

• Capacity

• Capital

• Collateral

LOOK GOOD FROM THE GET-GO

• BE PREPARED

• BE THOROUGH

• BE TRUTHFUL

MAKE YOUR BANKER/LENDER A TRUSTED ADVISOR – KEEP THEM INFORMED AND UPDATE THEM

REGULARLY. THEY ARE A MEMBER OF

“YOUR TEAM”

About Community Capital New York

• Community Capital New York is the leading not-for-profit small business lender in the Hudson Valley, the Bronx and Fairfield County.

• Our lending process is personalized and intended to help those small business that need financing to launch or grow their business – but cannot meet the credit and collateral requirements of Banks.

• Rates are low, a broad range of credit scores (600+ FICO) and alternative forms of collateral are acceptable.

• On-line application with lending decisions made locally by our loan committee of lenders and entrepreneurs.

• See “Loans at a Glance” for specific loan terms and documentation requirements.

About Community Capital New York

• Community Capital New York lends $1,000 -$50,000 to start-ups and existing businesses

• Community Capital New York is overseen by the SBA, the Treasury Department and Empire State Development Corporation (ESDC). Loan capital is BORROWED from the SBA and ESDC.

• Community Capital New York provides over 3,000 hours a year in technical assistance to applicants, clients and local entrepreneurs on a variety of subjects through one on one counseling, workshops, seminars, newsletter and on-line training materials.

Contact Information:

Simone Obermaier

914-747-8020 ext 10

sobermaier@communitycapitalny.org

Community Capital New York

7 West Cross Street

Hawthorne, NY 10532

www.communitycapitalny.org