qprev_HBB Manual 2.qxd - Small Business BC

interest rates or rental charges for borrowingmoney. This is important research even when youplan to get necessary financing from othersources.Shop Around for Best DealsBanking is a business just like any otherbusiness. There are very real differences betweenwhat financial institutions offer. Keep goodrecords, and use these first interviews to“test the waters” and to get a feel for how latermeetings with lenders may go.If the lender – for reasons of its own – wouldnever give you money for your particularbusiness idea, better that you find out now thanlater. Loans officers at banks can help you assessyour business idea, too. If people you speak toexpress reservations about some aspect of yourplans, consider that input carefully. Thesecontacts have experience you can use. If bankcontacts are generally positive, you can feelreassured that you’re probably on the right track.Go Well Prepared with QuestionsContacts at financial institutions will only be ableto provide such feedback if you are well preparedwith certain questions you want answered. Beingwell-prepared doesn’t mean waiting until you arein need of the money.It means knowing what questions you needto research at this early stage of your businessdevelopment.Use the following questions to guide generalresearch on financing options:• Is a certain balance required in a businessaccount before a loan can be considered?• Will the lender give the business a line ofcredit? If so, what are the requirements andconditions?• What are current interest rates for the line ofcredit and other types of loans or financing tobe considered?• Does the lender have limitations on the numberof small loans it grants or the types ofbusinesses to which it gives loans? If so, whatis the current situation?• What is their policy on the size or descriptionof cheques deposited in your personal accountto be held for collection?• Will cheques under that size be creditedimmediately to your chequing accountbalance?The last two questions are important because ifyou don’t have a business account and creditreferences, the lender may hold all cheques forcollection until it has some experience with youand your account. This can affect the money youhave available and your cash flow – because youcan’t count on using money from these depositedcheques immediately.The buck starts here...Rod McQueen in The Last Best Hope: Howto Start and Grow Your Own Business (1995)advises the following when approaching lenders:1. Right church, wrong pew – Don’t wastetime on lenders or investors with no power,no money, and no prospect of ever havingeither.2. One shot – You’ve only got perhaps two orthree minutes to create a positiveimpression. Be enthusiastic and clear.solutions for small business home-based business 73