Small Business Financing ©

LaSalle Bank Points of Contact

Charles Parker Relationship

Manager/ Commercial Lending

810-762-5480 Charles.parker@ab

namro.com

Teresa Grace Branch Manager 810-736-2057 Teresa.grace@abn

amro.com

Business Plans

Sources SBA

http://www.sba.gov/starting_business/planning/writingplan.html

State of Michigan http://www.michigan.gov/medcguide/0,160

7,7-149-9263---,00.html Software

Business Plans, cont.

Sections The Business Management Marketing Finance Production

Business Plans, cont. Sections of interest

Marketing Target market How you will be reaching them

Projections Income statement Usually for the next two years

Realistic Unrealistic projections may lead to business

failure

Business Plans, cont.

Why pertinent? Sets a roadmap for the business

May plan for future company events Examples

Expansion or move to a larger facility

Allows the business to check on its progress and financial operations Example-company can check on the actual

results of operations versus the forecasted financial projections

Important Contacts Attorney

May set up the LLC or corporation Able to answer liability and legal

questions CPA

May set up accounting/bookkeeping record system

May assist with projections May do payroll and other business

functions for you

Financing

Conventional SBA

The SBA guaranties the loan. The bank is your lender, not the SBA. May use for start-up business or a newer

business. Please call for details.

Financing, cont.

Alternatives HELOC REM

What Banks Look At

Collateral Types

Accounts receivable Inventory Equipment Machinery

What Banks Look At, cont. Collateral, cont.

Gross value Generally this is the purchase price

Authenticated by an invoice or receipt Trade Value

Check with your CPA for the current GAAP on this topic

What Banks Look At, cont. Collateral, cont.

Discounted value Banks use this amount for analysis Why banks use this versus the gross

value If the loan goes bad, the bank liquidates the

collateral The bank does not hold the collateral

indefinitely. The discounted value estimates what the

collateral may sell for.

What Banks Look At, cont.

LTV=loan amount / discounted value Conventional

Maximum generally is 75% - 80% SBA

Maximum is 90% Lower LTV=Lower risk for the bank

What Banks Look At, cont.

Cash Flow Business

Start up-use projections New or newer business-historical financial

operating results from business federal tax returns

Personal Review personal federal tax return Analyze cash flow from federal tax return

versus the payments for personal debt

What Banks Look At, cont. Cash Flow, cont.

Global Combine business and personal cash

flows Gives a picture of the overall, combined

cash flow

What Banks Look At, cont. Personal credit

Score Average is 675 Higher the score the better Higher score = lower risk for the bank

Past dues 30-60-90 day past dues Difference between a REM and credit card past

due Public History

Civil actions, lawsuits, and bankruptcies

What Banks Look At, cont.

Experience Want to see experience in the industry If person has no experience, person may

not know of potential issues May aid in the business failing

Overdrafts Personal Business

Small Business Lending

Please call with any and all questions. When you contact us, please let us

know that you saw us at the conference.

Thank you for your attendance.