By Chad Shelley
Commercial Banking Officer
Obtaining business financing can be a challenge, whether you are looking to exercise your entrepreneurial spirit or looking to expand a seasoned one. It’s important to know what lending institutions are looking for in their review process.
Due to challenges faced in the review process, it’s essential to understand the basis on which loans are made. Do your financials and business plans provide a clear view of your company’s performance?
The following are some “key” areas that the ideal business loan candidate may be expected to show:
• Business Finances/Collateral
A solid balance sheet; assets, financial reserves (liquidity) and personal collateral to endure fluctuations that the business may experience and still make timely payments.
• Cash Flow
As an owner of an existing business, always remember that cash flow is king! The ability to show sufficient cash flow is paramount. Remember, having projections for the coming year(s) provides a roadmap of what is expected and how you plan to get there.
• Business Plan
Start-ups should have a solid business plan that emphasizes your strengths and knowledge of your product/service. A market analysis will provide in-depth information to support your business plan.
• Business/Personal Credit
Be mindful of your personal and business credit; if there are blemishes, creditworthiness is not an impossibility.
Whether you need help repairing your credit, finding the right loan for your business or help through the application process, there are people/programs in place to help. Your local community banker, local Small Business Development Centers, Women’s Business Centers, and SCORE (a mentoring organization for small business owners) are always available to assist. Contact your local MutualBank; we will be more than happy to help you reach your goals!