How to Improve YOUR Chances of Getting $$$ for YOUR Business. SCORE June 25, 2015

Transcription

1 How to Improve YOUR Chances of Getting $$$ for YOUR Business SCORE June 25, 2015

2 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

3 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

4 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

5 Organizations that Can Help You SBA 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

6 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

7 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

8 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

9 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

10 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

11 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

12 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 year term

13 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 ( or Reward ( Getting some SEC attention Great for creative or other projects that tap into a crowd s passion

14 Five C s of Small Business Lending Character Credit Capacity Capital Collateral

15 LOOK GOOD FROM THE GET-GO BE PREPARED BE THOROUGH BE TRUTHFUL

16 MAKE YOUR BANKER/LENDER A TRUSTED ADVISOR KEEP THEM INFORMED AND UPDATE THEM REGULARLY. THEY ARE A MEMBER OF YOUR TEAM

17 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.

18 About Community Capital New York Community Capital New York lends $1,000 -$50,000 to startups 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.

19 Contact Information: Simone Obermaier ext 10 Community Capital New York 7 West Cross Street Hawthorne, NY