David Knoble, CPA, PLLC

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Obtaining the First Business Loan

Obtain­ing financ­ing for busi­ness is more dif­fi­cult than ever.  This is espe­cially true for a new busi­ness.  Most banks will want to see a busi­ness plan and finan­cial state­ments.  How­ever, they will also want more.

With­out ques­tion, one of the most impor­tant aspects of ask­ing for a busi­ness loan is who you are.  I am not refer­ring to the title of ‘Pres­i­dent’ or ‘Owner.’  The bank already knows that.  I am refer­ring to you — your back­ground and how it relates to your business.

For exam­ple, what is your degree?  Does it relate to what you are doing?  What is your his­tory of suc­cess and fail­ure?  Be sure to artic­u­late not only that you failed and why, but what you learned from that experience.

What are your strengths?  What are your weak­nesses and who is going to work with you to fill that void?  The bank may see you as very cre­ative, but not a stel­lar sales­man.  If that is the case, be ready to tell them who is sell­ing for you and why they will help you succeed.

Who is your mar­ket­ing arm?  What mar­ket­ing are you putting in place to get things started?  Does it fit your busi­ness plan and over­all strat­egy?  Be sure you are con­sis­tent!  Banks know you under­stand what you are doing when you are con­sis­tent all the way through your pre­sen­ta­tion.  This includes a mis­sion, goals, strat­egy, prod­uct, peo­ple — in short the entire business.

Did you notice I haven’t even said finan­cial state­ments yet?  Finan­cial state­ments and pro­jec­tions are extremely impor­tant.  How­ever, if you can­not get past the intro­duc­tion and get the bank happy with your con­cept, the finan­cials don’t matter.

So, now that you are ready to present your finan­cials, be sure you have a CPA pre­pare them with you.  You will want some­one look­ing over your shoul­der that has expe­ri­ence not just in num­bers, but also in busi­ness.  Make sure you have some­one that you trust.  Make sure they have a rep­u­ta­tion that the banks will trust and then bring them with you to meet with the bank.  See­ing a CPA as your part­ner (fig­u­ra­tively) will help immeasurably.

Even bet­ter, develop a rela­tion­ship with your CPA that extends past get­ting a loan.  If you can tell the bank that your CPA will be your trusted busi­ness advi­sor and help you with your taxes or pro­vide reviewed finan­cial state­ments, maybe just keep your books and records — then the bank will con­tinue to see strength in you as a customer.

This will not guar­an­tee you suc­cess with each and every loan.  In fact, you will prob­a­bly fail to get some of the financ­ing that you want.  How­ever, if you pre­pare your­self well, the banks will know and you will stand a much bet­ter chance of obtain­ing your financ­ing.  Above all, be blunt and hon­est.  The bank will respect that much more than a sales pitch.

Note that we per­form all of this work and have 15 years of expe­ri­ence as an entre­pre­neur to back it up.  Con­tact us if you desire this service.

© 2009, david.knoble
by David Kno­ble, CPA, PLLC
Serv­ing Non-Profits, Busi­nesses & Indi­vid­u­als
Rock Hill, SC

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