Over the past month I have walked several clients in to see the Loan Officer of a local bank to discuss how to plan the growth of their businesses. As business owners it is important to look ahead for not only the needs of the busy last quarter of the year, but also to your plans and projections for the coming year. Most small business owners are under the misconception that bank loans require a full business plan, with projections and a lot of other paperwork and documents. Don’t get me wrong, those things are needed for large loans and investments.

Banks have come to recognize the needs of the small business owner and are making the financing solutions easier. Depending on the amount of credit you need, the application process is shorter and requires very limited paperwork.

For larger short term working capital needs, including the financing of accounts receivable, inventory, or new business acquisitions, the Business Line of Credit can offer you flexibility for business purchases with a revolving credit line and even check access to funds. Your credit availability is continually replenished as balances are repaid, which makes it ideal for working capital needs. It can also offer interest-only monthly payments.

Is SBA Loan Financing Right for You?

Compared with conventional business financing, SBA loans can offer easier qualification, lower down payments, more affordable monthly payments, and full amortization. An SBA loan may be a good choice if you:

• Are starting or buying a new business.
• Have been in business a short time.
• Need additional working capital to finance rapid growth, such as for new equipment, facilities construction or purchasing inventory.
• Need high loan-to-value financing.
• Are unable to obtain conventional financing.

Being prepared and keeping up-to-date, positions you to act quickly on financial needs and/or opportunities. Here are some of the things to have in place:

• Have your accounting records up to date. This is the entrepreneurs’ most important step. How else do you know if you are achieving your goals?
• Are you within budget? Do you stay on top of what is coming in and what is going out? When you are on top of the flow, you are more likely to avoid the pitfalls that consume time and energy, (scrambling to find cash, trying to collect overdue receivables, handling creditors).
• Build a Basic Financial Package for your business; include

1. a Balance Sheet that shows the status of company assets, liabilities and owners’ equity,
2. a Profit and Loss Statement that summarizes the revenues, costs and expenses during one accounting period,
3. a Cash Flow Projection which estimates which money will actually flow into and out of the business. These are some basics; other financial activities may require greater information.
4. Get to know the loan officer of your bank. The better they know you, the more they work to help your business grow.

Staying on top of your business needs is “good business smarts”. Don’t wait until it is too late or you are down to the wire, know what is available for you and be able to act quickly.

The Challenge: Review how close you are to your projected gross profit for this year, 50%, 75%, 80%?