guidant webinar2011 3 7 (1)
DESCRIPTION
Financing Options for BusinessesTRANSCRIPT
Small Biz & Franchise FinancingStrategies that work in today’s economy
Your Hosts
Chris Hill214.440.3932
Gary Gerhold309.282.6186
Jim Love806.418.2669
Bob Melberth941.487.7147
Susan Mell813.862.0218
Dante Vespignani412.916.9919
Mike Clausen760.230.8406
Doug SmithDirector of Business Development
Agenda
1. Debt-related financing2. Equity-based funding3. Layering financing strategies4. Comparing the costs5. Q&A
Small Business Financing
1. Home Equity2. SBA Loans3. Equipment Financing4. Unsecured Loans
SBA Loans
SBA’s purposeTerms
Up to 10 yrs, fully amortized2.25-2.75 pts over prime
$5,000,000 limit32 determining factors
Cash, Credit and Collateral
SBA Loan Consideration
Eligibility RequirementsVariable ratesCollateral requirementsAmortization scheduleTiming
Equipment Financing
80% of companies leaseIndustry applicationEligibility requirementsFix rates and paymentsCollateral requirementsTiming
Unsecured Loan
Signature Loan vs. Line of CreditUp to 100k for new businessesNo collateral requiredFunding in less than 45 daysStringent eligibility requirements
Unsecured Loan Considerations
Beware of Internet BrokersFees up to 10% of loanDo you need subsequent funding
Equity-Based Funding
401(k) Small Business InvestingDebt-free investingUp to 100% of your IRA/401(k)Ongoing employee benefitsUse as equity injection for a loan
Created in 4-Simple Steps
1. New corporation formed2. Specific 401(k) created3. Roll/all/part of retirement assets4. 401(k) invests in business’s stock5. Employees make ongoing
contributions
Structural Requirements
1. C Corporation2. Qualified Plan3. Operating Company4. Exclusive Benefit
Operational Requirements
1. Must be employee2. Stock purchased at FMV3. Paid reasonable compensation
once an operating company4. Contribute to the plan5. No discrimination
401(k) Considerations
1. The type of entity2. Potential for loss3. Fees: Set-up and administration4. Reduce business debt5. Grow your retirement funds6. Outside tax/legal team must support
Choosing a Provider
1. Highly experienced team2. Staff to support clients3. Services provided in-house4. Great value5. Stand behind their program
Cost of Capital - $100,000
AssumptionsHELOC – 20yr @ 7%SBA – 10yr @8%Unsecured – 5yr @ 11%P2P – 3yr @ 14%401(k) – no payments$-
$20,000 $40,000 $60,000 $80,000
$100,000 $120,000 $140,000 $160,000 $180,000 $200,000
Payments
Set Up
Monthly Payments - $100,000
AssumptionsHELOC – 20yr @ 7%SBA – 10yr @8%Unsecured – 5yr @ 11%P2P – 3yr @ 14%401(k) – no payments
Get Pre-Approved
1. Talk with a professional2. Entertain each option3. Don’t waste time with
concepts you cannot buy
Questions & Answers
Get Started Today
Doug SmithDirector of Business Development425.289.3210888.472.4455 ext. [email protected]://successstories.guidantfinancial.com
Your Hosts
Chris Hill214.440.3932
Gary Gerhold309.282.6186
Jim Love806.418.2669
Bob Melberth941.487.7147
Susan Mell813.862.0218
Dante Vespignani412.916.9919
Mike Clausen760.230.8406
