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Lesson Goals:

• Realize sources of outside capital• Identify types of loans offered by commercial

lenders• Learn how to prepare a loan package• Learn how to establish and maintain a

relationship with a commercial lender

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How much will you need?Depends on:

• Type of business• Kinds of products / services

provided• Who suppliers will be• Where you are located• Amount of competition• Customer Purchasing Power• Costs

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Where will the money come from?

• Personal Savings• Family and Friends• Banks, Savings and Loans, Credit Unions• Commercial Finance Companies• Venture Capitalists• Government Programs

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SBA Loans

• 7(a) Regular Business Loans• 504 Loans (certified development company)

• Low Doc Loans• SBIC• Capital Access Loans (CAP)• Others

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Other Types of Business Loans

• Medium-term Loans• Long-term Loans

• Mortgages• Real Estate Loans

• Equity Financing

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What kind of collateral will you need?

• Personal Assets• Savings Accounts• Life Insurance Policies• Stocks and Bonds

• Co-Signers• Lease Assignments / Warehouse Receipts• Mortgages

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The 5 C’s of Credit

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Preparing Your Loan Package

• Business Description• Management Profiles• Market Projections• Purpose• Amount• Repayment Plans• Financials

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Establishing and Maintaining Rapport

With Your Banker

• Establish a good credit history• Determine if your business is

too big or too small• Invite your banker to your

business

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Establishing and Maintaining Rapport With Your Banker

• Keep your banker in the information loop

• Work in advance• Never surprise your banker• Be honest with your banker

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