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2013 | Buch

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Getting a Business Loan

Financing Your Main Street Business

verfasst von: Ty Kiisel

Verlag: Apress

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

Every day, Main Street businesses wrestle with the challenge of finding the cash to finance growth or use as working capital. The local banker often wants a credit score of 720, three or more years in business, and a fat savings account. No wonder local bankers approve only 10% of loan applications.

Getting a Business Loan: Financing Your Main Street Business shares something your local banker might not want you to know—small business owners have options. And this book describes those alternative lending sources in detail, as well as traditional sources of funding like banks and credit unions.

Half of all business startups don’t make past their fifth birthday—and often because they can’t find the financing required to sustain their operations. Whether you own a small restaurant, a bicycle shop, a hardware store, a small manufacturing company, or a service business, Getting a Business Loan offers easy-to-understand descriptions of loan options that can keep you going, as well as practical advice on where to look for money and how to apply.

What would you do with an extra $40,000? Expand your restaurant? Hire a new employee to fulfill a new contract? Buy a needed piece of equipment? Getting a Business Loan will:

Detail how bankers look at you and your loan application Explain the menu of non-bank financing options available to business owners, like asset-based lending, factoring, merchant cash advance, local “hard money,” and more Show how to locate potential lenders via the Internet and other means Show how to prepare before you visit the lender or fill out an application Main Street businesses aren’t limited by the local bank’s footprint any more. There are people and institutions all across the country that lend money to small business owners. If you want to find the money you need to strengthen and expand your business, Getting a Business Loan will show you how.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Funding the American Dream

10 Percent Just Isn’t Good Enough

Abstract

Every day, Main Street business owners wrestle with the challenges of finding the cash they need to finance growth or to use as working capital. Banks want a credit score of 720, three to five good years in business, and a fat savings account.

Ty Kiisel

Chapter 2. Building a Relationship with the Bank

Date Before You Marry

Abstract

Business is personal. I once worked with a guy who didn’t think that way, and he worked very hard to avoid having personal relationships with his customers, his employees, and his vendors. That attitude didn’t serve him or his business very well, because doing business is a personal endeavor. Just like any worthwhile business relationship, the same holds true for the relationship with your bank. It’s important to get to know your banker.

Ty Kiisel

Chapter 3. Keeping Your Relationship Personal

When the Honeymoon Is Over

Abstract

Once upon a time there was a very motivated banker. He was my banker. I mentioned him earlier.

Ty Kiisel

Chapter 4. Getting the Right Bank Loan

My Porridge Is Too Hot!

Abstract

As a little boy, I loved the story called The Three Bears, but it also frustrated me. I didn’t think Goldilocks was that bright. Who would eat the porridge, break the chair, and then crash in the bed upstairs? Nevertheless, the story teaches us that one size does not fit all—a lesson that is particularly relevant to small business financing.

Ty Kiisel

Chapter 5. Navigating the Maze of the SBA

Are We There Yet?

Abstract

When the U.S. government talks about small business, what they’re saying might not be what we’re hearing. They tend to look at small businesses differently than most of us do. You might be surprised to learn that Uncle Sam considers a $30 million company with over 200 employees a small business, but I doubt most Americans would. Needless to say, the financing needs of the local bookstore or barbershop around the corner are very different from a tech firm with hundreds of employees.

Ty Kiisel

Chapter 6. Angels and Venture Capital

The Myth of the Shark Tank

Abstract

There’s a lot of talk in the media about venture capital (VC), usually associated with startups. Television makes it look like VC firms and angel investors are lining up to take your great idea and give you the money you need to get it going. Although there might be investors looking for something like your business, the truth is, an angel or VC firm is typically looking for a sexy tech startup that could turn into the next Facebook—not your Main Street business.

Ty Kiisel

Chapter 7. The Sun Will Come Out Tomorrow

You Have Options

Abstract

The last few chapters discussed the challenges associated with financing your small business at the bank and how only 10% of Main Street business owners actually leave the bank with the financing they’re looking for. You read about what I call the “myth of the shark tank” and learned why so few businesses attract a venture capitalist or angel investor.

Ty Kiisel

Chapter 8. Asset-Based Lending

Need a Piece of New Equipment?

Abstract

When you’re applying for a loan, it helps to be specific. If the reason for the loan is to purchase machinery or tools (work vehicles, manufacturing tools, computer hardware/software, and so on) needed to conduct business, there are lenders willing to use the purchased equipment as collateral. Many lenders like these asset-based loans and will finance 100% of them.

Ty Kiisel

Chapter 9. Factoring

Tap Into Your Accounts Receivable

Abstract

Factoring, which involves offering your accounts receivable (AR) to another party at a discount in exchange for immediate cash, has been around for a long time. Its origins lie in international trade and it’s said to have started in the ancient world. The Europeans were factoring AR prior to 1400 and the idea came to America with the pilgrims. It’s the financial tool that wealthy financiers used to fund shipping companies to make the long voyages to the Orient or the New World to bring back goods like spices, cloth, tobacco, and other precious commodities.

Ty Kiisel

Chapter 10. Commercial Real Estate Loans Location, Location, Location

Abstract

Many alternative loan products are designed to fill a specific need. Commercial real estate loans are designed to help small business owners finance office buildings, warehouse space, retail shops, industrial buildings, or other stand-alone buildings. Like a home mortgage, this type of loan typically has longer payment terms than the other small business loans you’ve read about.

Ty Kiisel

Chapter 11. The Merchant Cash Advance

Credit or Debit?

Abstract

Young businesses, even thriving ones, often struggle to find the cash they need to grow and operate. If they’ve been in business less than five years, they don’t have a track record. If they’ve been operating on a shoestring, they probably don’t have the best credit rating. I know several young entrepreneurs who used their personal credit cards to keep the doors open—which can sometimes be problematic from a credit-management perspective.

Ty Kiisel

Chapter 12. They Call It a Credit Card for a Reason

Don’t Leave Home Without It

Abstract

I couldn’t help but think of the actor Karl Malden when I got my first credit card. I remember him as kind of a hard-nose cop on the TV show, The Streets of San Francisco. His co-star was a very young Michael Douglas. I remember watching the show as a teenager. Malden had enough street cred from the series; I can still remember an American Express ad that featured him as their spokesperson. Although Malden was talking about Travelers Checks when he said, “Don’t leave home without them,” the tag line eventually applied to the American Express card too.

Ty Kiisel

Chapter 13. Peer-to-Peer Loans

Brother, Can You Spare a Dime?

Abstract

One of the toughest stages for an entrepreneur to find financing is during the startup phase. It’s even tougher if your startup is in the idea stage, has no revenues, and doesn’t even have a real product yet.

Ty Kiisel

Chapter 14. Business Acquisition Loans

When You Need Money Now

Abstract

Many entrepreneurs, including a lot of Main Street business types, opt to purchase an existing business rather than build their business from the ground up. As I mentioned earlier, growing up in a family with a small business, there were a lot of conversations around the dinner table about the nature of small business—including the virtues of starting your own business as opposed to buying an established one. Because my dad had been successful at starting his business with nothing but a hope and a prayer (in addition to a pretty hefty second mortgage on our home), he didn’t think much of buying an existing business. Although I respect his opinion, my forays into business ownership have included purchasing a business already established with a clientele.

Ty Kiisel

Chapter 15. Franchises

There’s a Loan for That

Abstract

Many entrepreneurs decide to buy a franchise rather than start a new business for a number of reasons. Some of them are more obvious than others, but here are a few of them:

Ty Kiisel

Chapter 16. Startup Funding

Crawl, Walk, Run!

Abstract

One of the biggest challenges facing most budding entrepreneurs is finding enough capital to get things rolling. Finding a lender willing to fund an untested business model or an untested entrepreneur is a challenge. Although there are funds available for starting new businesses, finding the money may consist of a combination of the options mentioned in this book.

Ty Kiisel

Chapter 17. Crisis Borrowing

Help!

Abstract

Growing up in a small business family, the ups and downs of my Dad’s business was a regular topic of conversation around the dinner table. It didn’t help that my Mom worked in the business and that, as a teenager, I drove the delivery truck and worked in the warehouse. As I got older, I started working on the road as an outside salesman. My dad often expressed the opinion, “The only time the bank seems interested in lending me money is when I don’t need it.”

Ty Kiisel

Chapter 18. WOSB and Other Loans

It’s No Longer a Man’s World

Abstract

Former SBA Administrator Karen Mills suggested in March of 2012, “Today, women-owned businesses are the fastest-growing segment of new businesses in our economy.”

Ty Kiisel

Chapter 19. Small Business

The Backbone of America

Abstract

There are nearly 30 million small businesses in this country—six million of them with 20 or fewer employees. These are the businesses you and I identify with when we think of small businesses. It’s where we all go to buy groceries, gas up our cars, get a haircut, and have our shirts pressed. When politicians want to talk about small business, these are the folks they talk about. I think it’s past time they stopped talking about how important these businesses are to our economy and started doing something to help them. Writes Gary Belsky:

Ty Kiisel

Backmatter

Titel: Getting a Business Loan
verfasst von: Ty Kiisel
Verlag: Apress
Electronic ISBN: 978-1-4302-4999-3
Print ISBN: 978-1-4302-4998-6
DOI: https://doi.org/10.1007/978-1-4302-4999-3