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interim financial information is likely
to reflect corresponding improvement
in your company’s performance. This
will help build your case.
Be prepared to provide additional
information as requested by the banker
as part of a loan application process.
Follow-up information might include
schedules of accounts receivable, inventory
and accounts payable; checking
account statements; and asset appraisals.
7Ask about SBA loans The U.S.
Small Business Administration
guaranteed loan program is used
by many banks to extend financing that
otherwise might be considered marginal
or even unacceptable. The way the program
works is the bank extends the loan
directly to the business with the SBA
providing a guaranty for a percentage
of the loan—as high as 85% for loans
of $150,000 or less. The program has
been expanded by the federal government
to cover higher loan amounts (up
to $5 million), reduce fees on a temporary
basis and allow more flexibility in
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34 | BedTimes | April 2011
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refinancing existing debt.
An SBA-guaranteed loan might be
the best option for your business. A
small business can qualify for a loan
even with insufficient collateral, as
long as cash flow can be documented
to cover repayment. And the allowable
loan terms are longer than those typically
available for conventional loans.
For instance, an equipment loan can be
extended for as long as 10 years, compared
to five to seven years for conventional
financing.
You will need to do some homework
to find out which local banks participate
in the SBA program. Rankings are
published and can be found online. You
also can contact the SBA directly and ask
for a list of banks in your market. To learn
more about the SBA, check www.sba.gov.
8Become a multiservice client
Just as you seek to cross-sell
as many products and services
as you can to your customers, banks
focus on multiservice client relationships
in their business develop-
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ment efforts.
In addition to loans and deposits,
many banks offer dozens of financial
services, including credit cards,
debit cards, cash management,
online banking and automatic bill
pay. Some banks offer trust services,
plan administration (such as 401k),
brokerage and investments. Others
sell insurance. Your new bank will
want the opportunity to work with
your business and with you personally.
The more services you are willing
to buy from your new bank, the
stronger relationship you will have.
Many banks are hungry to
establish new small business relationships.
Now might be the right
time to find a new financial services
provider for your business. BT
J. Tol Broome Jr. has spent nearly 30
years working in commercial lending
at various financial institutions and
currently is an executive vice president
and manager of the Specialized Lending
Group at BB&T.
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