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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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