Winning Over Lenders by Being Prepared: What You Need as a Small Business Owner

by Crestmark 25. October 2013 04:11

Getting a small business loan can be a challenging task when presenting a valid case for lending. So what information and paperwork are you going to need when applying  to a lender in hopes that they will not only set you up with a loan, but will also get you a favorable one?

First, be confident in your loan request. Know the amount you will need to fund your growth, be prepared to discuss what opportunities and income will come from this loan, and go in prepared with statements and research to explain the costs of everything from raw materials of new product to marketing expenses. Be as detailed as possible

Whether you’re applying to a traditional or alternative lender, the following materials should be prepared ahead of time:

  • • Proof of a good income record
  • • Any necessary loan applications
  • • Personal Background and Financial Statement
    • • Statement of Personal History
    • • Personal Financial Statement
  • • Business Financial Statements (for the last two fiscal years)
    • • Profit and Loss Statement
      • • Current within 90 days of your application.
  • • Projected Financial Statements
    • • Projected income and finances for the next year with an explanation of how you will attain that goal.
  • • Ownership and Affiliations
  • • Business Certificate/Licenses
  • • Loan Application History
  • • Income Tax Returns (for the last two years of filings)
  • • Business Overview and History
    • • Bring a brief statement highlighting the history of your business and its successes and/or challenges.
    • • Explain in this why you need a loan to continue its success.

When meeting with an alternative lender, you will need to prepare a few additional documents beyond those listed above. An alternative lender like Crestmark can offer more flexible funding options, and has the ability to work with businesses that would not otherwise qualify for traditional bank financing. If you’re looking to win over an alternative lender, they may be interested in also seeing the following:

  • • Accounts Receivable Aging/Detailed (current month-end)
  • • Customer Contact List, including city and state
  • • Accounts Payable Summary (current month-end)
  • • Invoices and Supplementary Back-Up
  • • Purchase Orders/Contracts
  • • Detailed Inventory Report, showing raw and finished goods, as well as work in process
  • • Marketing brochures, informative business overview

Keep in mind that while this is a list of commonly-required documents, it’s important to check with each lender before meeting with them. Also, documentation is a good start, but it’s really only half of it. You’ll also need to be prepared to sell your business and yourself as its leader. Prove that you’ll be a valuable and trustworthy investment by showing a plan to pay back the loan, strong credit statements showing you have creditworthiness and several reasons why you believe your business has a solid chance at success with this funding. 

Are you in the process of looking for a lender? We want to help, and have professionals ready to discuss your business capital needs.

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Small business loans

Four Ways to Know if a Business Line of Credit is Right for You

by Crestmark 11. September 2013 11:05

crestmark lending

Starting a new business is not the only time an entrepreneur may look for help with financing. Some small business owners—especially those who operate seasonally—experience fluctuations in cash flow throughout the year. A line of credit can help to smooth over the ebb and flow of sales and cash flow throughout the year. 

A business line of credit provides on-demand funding, and there are a number of different types of lines of credit ranging from unsecured, meaning that it is not backed by any kind of assets; to secured, backed on a general basis by all assets of the company, or by specific assets that are structured into the funding formula of the line of credit.

Here are four questions to ask yourself before approaching a lender:

1.) Does your business have uneven cash flow? The best use of a business line of credit is for paying off expenses in the short term that can be easily paid off in the long term. This works well for short term expenses such as payroll and inventory.

2.) Are you able to pay off the balance of your credit line? It can be tempting to carry a balance on a line of credit, but this will ultimately damage both your relationship with the lending bank and your company's financial health. Unless you are able to pay off the balance quickly, you should not run the risk of borrowing against a line of credit, but possibly consider a term loan for long term items like buying equipment.

3.) Would a business credit card be more appropriate for your needs? A line of credit will have a lower interest rate and higher credit limit than most business credit cards. It will not, however, provide line by line tracking of expenses along with date and location of purchases. This can be very valuable for record keeping and future planning, and also allows you the flexibility to provide individual cards to key employees/staff for travel or other day to day business expenses.

4.) Are all business owners available to apply? If your business is a partnership or has multiple owners, at least 80% of the owners must be represented in the credit application. This makes applying for a line of credit a decision that must be made across all owners of your business.

If you are just starting out, looking to obtain working capital for your existing business, or want to grow from your established base, Crestmark’s business development team can work with you to determine which type of financing solution is the best fit for your current business situation.

 

 

 

 

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Business

Top 5 Mobile Apps for Entrepreneurs

by Crestmark 29. July 2013 03:56

As an entrepreneur, staying organized while on the go will help keep your business—and even your day—running smoothly. And while the ability to keep constantly connected to your work with a smartphone or tablet can sometimes be overwhelming, a number of business-minded apps have been developed over the past few years to make your life a little easier.

1. Evernote: With a motto like “Remember everything,” this is going to be a top-pick for any busy entrepreneur. Evernote makes it easy to keep notes, files, and even clippings of entire webpages in one place which can then be accessed by both mobile devices and the Web. Potentially one of the best examples of this is using it for travel since you can keep all itineraries, confirmations, scanned travel documents, maps, and plans in Evernote, ready for when you need them.

2. Pocket: How would you like to have a virtual cloud that can store anything from articles to videos, straight from your browser or apps? That’s exactly what you can do with Pocket. Formerly called “Read it Later,” Pocket can save just about anything for you to read when you’re ready.

3. Square: A card reader, simple pricing, and smarter business tools make it easy for businesses of any size to do what they love and get paid fast and easily. Use the free secure card reader sent to you to swipe cards on-the-go from anywhere. The Square Register app is free and easy to setup – just link your bank account and you’re able to accept payments almost instantly. You have the option to pay a flat monthly fee of $275.00 or a 2.75% fee per swipe. You will see your payment quickly and directly deposited within 1-2 business days.

4. Mint: This one is valuable for business and personal use. Named Best Finance App by the 1st Annual App Awards and TIME Magazine's 50 Best iPhone Apps of 2011, Mint enables you to track finances in real-time. You can enter transactions manually or sync your accounts automatically to track investments, sort transactions by category, set budgets, and create alerts.

5. FreshBooks: Speaking of finances, this cloud accounting app makes tracking time, logging expenses, and invoicing clients portable and painless. It also boasts team timesheets for projects involving more than one person’s billable time, multiple datacenters to back up secure data, and online payments so you can accept payments and put that money to work faster.

 

As an entrepreneur or business owner, what apps make your life easier? 

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Business

Manufacturing in the US – Where it’s Headed, and How to Finance It

by Crestmark 3. July 2013 10:52

For years, American businesses set up their manufacturing plants in foreign countries to take advantage of inexpensive labor. Recent changes to the United States economy are turning this trend around, however, and the U.S. is becoming an increasingly attractive option for manufacturing. It's not just American companies that are returning to the U.S. for these purposes: foreign businesses are offshoring their operations to the United States, too. 

One major reason for the sudden upsurge in U.S. manufacturing is the boom in shale gas production, which is helping to drop energy costs across the country. This affordable fuel helps to make the U.S. an attractive option for commercial manufacturing. Many companies that chose to run their manufacturing operations in other countries are finding that it can actually be cheaper to keep those operations in the U.S. Moreover, European companies are taking advantage of cheap gas prices and an available labor pool since natural gas in the U.S. costs roughly a quarter of the European price. 

manufacturer financing 

Although many companies point to labor costs as a good reason to outsource manufacturing jobs, the truth is that domestic operations are often the most cost-effective choice. Labor costs are rising in countries like China, where wages have grown a staggering 500 percent in the past 13 years, and are forecasted to continue to grow by 18 percent each year. Compare this to American wages, which have remained steady in certain areas over the same time period.

When looking at the total cost of ownership for any operation, many businesses are discovering that the expenses of energy consumption, delivery, freight, packaging, and other production costs are actually higher when the manufacturing is completed overseas. When GE moved its production from China to Kentucky, it experienced a 20 percent decrease in expenses, and other companies are seeing similar results. 

This "manufacturing renaissance" is good news for businesses who can reduce their expenses and streamline their operations by keeping them on domestic soil. It's also good news for American workers, who can begin to fill these positions, which will stimulate the economy and help increase demand for other goods and services to support the new manufacturing operations. 

Crestmark works as a lender to a variety of manufacturing related businesses. For details on how we may be able to provide financing for your business based on your accounts receivable, inventory and machinery/equipment, contact one of our lending experts today!  


 

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Industry Financing

Where in the US Might You Start Your Business?

by Crestmark 11. June 2013 05:47

For most, the best place to start a new business is where they live. After all, one of the benefits to working for yourself is deciding when and where to do your work. All the same, some cities can be more economically friendly toward small business than others.  Starting a business in one of these under-valued places could give you an advantage: 

1. Dallas, Texas. This fast-growing city has 6.5 million people and a number of industries to support and expand. Twenty Fortune 500 companies, including AT&T, make Dallas their home, but it's a valuable hub for small businesses, too: Over 80% of all businesses in the city are small, and these companies employ around 40% of the city's workforce. Dallas’ Business Assistance Center program offers resources and counseling for CEOs of businesses with five or fewer employees which could be invaluable for those entrepreneurs. 

2. Denver, Colorado. With a population of more than 2.6 million, Denver is a thriving city. Its residents have eclectic tastes, with interests ranging from outdoor sports to fine arts, and this makes it easy to find a profitable niche. The city is also the second-biggest hub for aerospace industries in the country, which generates a heavy demand for related services from the private sector. Small businesses with fewer than fifty employees make up 95% of the area's economy, and those employees are highly educated; one in three workers in Denver has a BA or higher.

3. Lincoln, Nebraska. The capital of Nebraska boasts the lowest unemployment rate in the country. With just 3.5% of the population unemployed, there are a larger-than-average number of working people with disposable income, which in turn can help feed a budding business. Prominent industries in Lincoln include medical, banking, information technology, education, call centers, insurance, and rail and truck transport.

4. Provo, Utah. This college town is supported by Brigham Young University, the third-largest private college in the country. The university serves as a backbone to the local economy as a constant stream of students require the services of a wide variety of businesses. Moreover, as those students graduate, they enter the workforce with valuable skills or start businesses of their own. Google Fiber also has a deal on the table to take over the iProvo fiber network in Provo, an announcement that will likely put Provo and its growing tech presence on the map.

5. Nashville, Tennessee. Although this city is still world-renowned for its music scene, Nashville has plenty of other things to offer. The city is a major cultural hub of the South, and tourist industries flourish there. On average, business costs are 18% lower in Nashville than in other similarly-sized cities, and the cost of living is 10.1% below the US average, making it conveniently affordable.

Wherever you decide to open your new business, the key is to find your customers and deliver what they want. As long as you can dominate a niche, you can be successful anywhere.  

Looking for lending  in your area? We have regional office locations in five states, and sales representation in locations across the country. No matter where you are located, give us a call. We can help you wherever you are.

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