Five Things to Know Before You Apply For A Business Loan
LaunchU is an on-demand learning series, hosted by Spark, offering insightful content from Manhattan, KS area-entrepreneurs and experts who know how to help you start your business strong.
In the first class in the series, Mike Simon, Executive Vice President at Outdoor Bank, shares invaluable insights on entrepreneurship, business financing and the crucial role of lenders in supporting business growth. Let’s dive into the key takeaways:
1. Building Your Winning Team
As you start your business, consider the critical need for a well-rounded business team, Mike says, drawing parallels to a baseball lineup. He stresses the importance of having specialists in finance, marketing, legal and HR, each playing a unique position to secure business success. Beyond immediate team members, he encourages entrepreneurs to leverage external experts and turn them into valuable players in navigating the intricacies of business financing. Mike emphasizes that entrepreneurship is not a solo endeavor but a collective effort involving building a team of diverse professionals.
2. Build and manage Your Credit
Mike simplifies credit building by unraveling the complexities of credit reports and offering concrete steps for entrepreneurs, including the positive role of credit cards when used responsibly, debunking the myth that they inherently harm credit scores. He also highlights the importance of reviewing your credit report and identifying and rectifying detrimental factors.
3. Involve Your lender in your business planning
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Navigating the decision of when to approach a lender requires strategic foresight. Mike guides entrepreneurs on timing their approach to lenders, encouraging them to reaching a stage where the sense chaos of growth becomes unmanageable on their own. Seeking a banker’s counsel early, before exploring alternative funding, ensures that entrepreneurs retain control and make informed decisions.
4. an SBA Loan isn’t your only financing option
SBA loans are valuable and accessible options for small business funding, but they are not the only option. Mike provides insights into loan packaging, a common practice allowing businesses to creatively utilize various loan products to achieve specific goals. From real estate loans to startup loans and revolving lines of credit, he highlights the diverse approaches lenders take in tailoring financial solutions. In these scenarios, lenders act as collaborative partners, sculpting financing strategies that support business growth without compromising financial stability.
5. Engage with the many entrepreneur resources Available
Entrepreneurship can be a lonely journey, but it doesn’t have to be unsupported. Engaging with community resources, events and entrepreneur groups will improve an entrepreneur’s likelihood of success. These resources, designed to aid startups and foster relationships with banks, offer cost-effective funding options with below-market rates. Entrepreneurs were encouraged to explore these avenues for sustainable and affordable financial support. Some of the diverse resources in the community include:
Network Kansas: Positioned as a crucial tool in bridging financial gaps, Network Kansas was highlighted for its role in providing financial support to businesses. Entrepreneurs can leverage their various loan types, such as gap financing and multiplier loans, tailored to meet specific needs. The organization collaborates with local counties, featuring e-community loans that involve a review board comprising business leaders, lenders and community representatives. Entrepreneurs are encouraged to work closely with Network Kansas, aligning their goals and financial needs with available resources.
Small Business Development Center (SBDC): Highlighted as instrumental in providing technical assistance to entrepreneurs, SBDCs assist in crafting business plans, financial projects, and offer guidance on becoming ‘bankable.’ They serve as a foundational resource for entrepreneurs to enhance their financial expertise and readiness for engaging with lenders.
Local Banks and Lenders: Throughout the discussion, the role of local banks and lenders was emphasized. Establishing early relationships with these entities allows entrepreneurs to navigate financial landscapes effectively. Mike highlighted the collaborative and supportive nature of lenders, showcasing how they work with entrepreneurs throughout their business journey, form startup loans to expansions.
Spark: As a hub of the local entrepreneur ecosystem, Spark was mentioned as a connector and supporter of entrepreneurs. Facilitating introductions to key people, providing access to education and training opportunities and even assisting in storytelling features to promote businesses. Its role in connecting entrepreneurs to the broader ecosystem was emphasized, underlining the idea that success in entrepreneurship is nurtured through collaborative efforts.
By tapping into these diverse resources, entrepreneurs gain access to a comprehensive support system. The collaborative nature of these entities ensures that entrepreneurs receive not only financial assistance but also guidance, mentorship, and the necessary tools for long-term success in their business endeavors.
The Launch U lending insights webinar provides an educational journey into the intricacies of entrepreneurship and business financing. Whether you’re a startup or an established business, Mike’s insights offer valuable lessons on team building, credit management, loan packaging and leveraging resources for sustainable growth.
To access the full webinar and gain deeper insights of these topics and more business-related content, please view the video below:
As the LaunchU Speaker Series unfolds, this educational journey delves deep into diverse facets of business building, empowering entrepreneurs with practical insights and actionable strategies. Stay tuned for upcoming educational review of webinars. The LaunchU series is your comprehensive toolkit for navigating the entrepreneurial landscape with confidence and success. To view other LaunchU Speaker Series webinars, click here.