Access to CapitalPreparing to Meet Your Lender

Overview

Overview:

• Start a relationship with a bank early

• Usually has strict guidelines

• Often takes into account both personal and business credit profiles - Make sure your information is accurate and up-to-date

• Requires business and financial documents - Be prepared to show two to three years of financials

Pro:

• Generally offer the best terms

Traditional Funding Case Study

Front Line Call Center

https://www.youtube.com/watch?v=mqN0nww4_i8

(video will be embedded on final version)

Overview:

• Some loans can have extremely generous terms, while others may be extremely expensive to pay back or have unusual requirements. Do your research.

Common Lenders:

• Community Development Financial Institutions • Community Banks • Community Credit Unions • Merchant Cash Advance companies

Pro:

• Wide variety of options and terms

Alternative Funding Case Study

BBQ’d Productions

Video editing in progress…

(video will be embedded on final version)

Overview:

• SBA helps finance start-up and existing small businesses• How can I apply for an SBA loan?•  What types of loans are available?• You’ll need a business plan- Check out SBA’s business plan tool:www.sba.gov/tools/business-plan

Pro:

• Longer terms and potentially lower down payments compared to other types of financing

SBA’s Most Popular Loan Program: 7(a)

https://www.youtube.com/watch?v=TPNnRVgLSBs&list=PLrwM1ZVcvDha2z8kvYx_wuW3uQxy58BEZ&index=9

Overview:

• Generally includes any time you give up some “ownership” in the company in exchange for operating

• Requires that your business be legally set up to allow for outside investment (i.e. not an option for sole-proprietorships)

• With the exception of “family,” this type of investment is generally limited to “accredited investors”

Common Funders:

• Friends and Family • Angel Funding • Venture Capitalists

Pro:

• Can be a wonderful way to bring on investors who have a financial stake in your success

Equity Funding Case Study

Moxie Jeanhttps

://www.youtube.com/watch?v=2Fl_wpnez7Y

(video will be embedded on final version)

Overview:

• Popular funding options where you ask a “crowd” to fund an idea

• Under existing SEC law, only “accredited investors” can use crowdfunding to invest in equity

Popular Platforms:

• Indiegogo • Kickstarter • RocketHub • Peerbackers

Pro:

• Generally used to pre-sell products or opportunities

Crowdfunding Case Study

Bohemian Guitar Center

https://www.youtube.com/watch?v=OWom-L1AyYA

(video will be embedded on final version)

Preparation

Personal Credit

House

Student Loans

Car Loans

Personal credit cards

Building Lease

Equipment

Business Loans

Business contracts

Business Credit vs

Helpful tip: Reduce risking your personal assets by avoiding using personal credit card for business expenses.

Personal Credit vs. Business Credit

(https://www.youtube.com/embed/OFs3Hj_sXkM)

1. Short description of the business

2. Historical financial statements

3. Projections and budgets

4. Schedule of off balance sheet assets and liabilities, including contingencies

5. Accounts receivable, accounts payable and inventory aging

6. Schedule of fixed assets

7. Tax returns

8. Personal financial statements and information

9. Honest and transparent information on the business, including any sort of management issues.

Tips for Applying for a Loan

Be Prepared to Answer:

1. Do you currently have enough income (whether it’s personal or business) to cover all of your personal expenses with funds left over each month?

2. Are you prepared to offer collateral for the loan (personal assets such as home, car or savings)?

Things to AVOID:

1. Disqualifying yourself before you get through the door.  - Even if you think there is a chance you might not be qualified, still go.  Meeting with lenders can open doors to other possibilities and even introductions to the ones that may be a fit. 2. Resistance to advice or change.  - Be prepared to listen to the lender and know that the path to your goals may not be as direct as you envisioned. 

Resources

 

Small Business Development Centers (SBDC’s)

Services include: business plan development, manufacturing assistance, financial packaging and lending assistance, exporting and importing support, disaster recovery assistance, procurement and contracting aid, market research help, 8(a) program support, and healthcare guidance 

SCORE

• Trained counselors, advisor and mentors to aspiring entrepreneurs and business owners• Run by volunteer executives (or former executives)• Services are generally free and operate throughout the US

SBA District Offices

SBA District Offices offer counseling, training and business development specialists to help start and grow your business.

The Veterans Business Outreach Program (VBOP) is designed to provide entrepreneurial development services such as business training; counseling and mentoring; and referrals for eligible veterans owning or considering starting a small business. Services include:• Pre-Business Plan Workshops• Entrepreneurial Training and Counseling• Mentorship• Assistance and training in topics such as exporting, franchising, marketing,

accounting and more.

Certified Development Companies (CDCs) are nonprofit corporations certified and regulated by the SBA, that work with participating lenders to provide financing to small businesses. There are 270 CDCs nationwide, each covering a specific geographic area.

Veterans Business Outreach Centers

Certified Development Companies (CDCs)

Women’s Business CentersA network of over 100 community-based centers that provide business training, counseling, coaching, mentoring and other assistance geared toward women.

Association for Enterprise Opportunity(AEO)

• A network of a broad range of institutions and providers of business development and support services• Business training and/or technical assistance• Many programs focus on disenfranchised business owners 

Opportunity Finance Network (OFN)

OFN is a national network of CDFIs who specialize in investing in opportunities that benefit low-income, low wealth, and other disadvantaged communities across America.

Community Development Financial Institutions (CDFIs)

The US Treasury Department's CDFI Fund has certified more than 900 CDFIs across the country. Many of these financial institutions not only provide financial services, but also have business training and technicalassistance available to entrepreneurs in their local area.

ResourcesLinks to all these organizations and more can be found at:

accesstocapital.com/links/