Community Bank Shares Top 3 Tips for Small Business Loan Seekers
What makes for an ideal community? As a community bank, we think it is as simple as a desirable place to both live and work. There are numerous factors that play a part in making a community desirable, including inclusiveness, diversity, being competitive and allowing for aspirational goals to be realized. We recognize the critical part local businesses play in bringing our ideal community to life. They are a major player in thriving communities—but they don’t just show up out of thin air. Small businesses are owned and run by passionate people who have great ideas. Lending to small businesses is vital to starting (and keeping) local companies running smooth. But how do you get the lending support you need?
Here are our top three tips for a small businessperson seeking to secure a loan:
1. Create a Savvy Business Plan & Value Proposition
The cornerstone for any business is a strong, clearly written business plan. This is essential when seeking a loan or business partner. Articulating what you want to do, who it is for, and what need it will meet should all be included in your plan. You should also make sure your business plan outlines how you plan to generate income, as this will be what the bank will look for as part of the loan request. Your unique qualifications and experience (and those of any partners you have) should also be included in your business plan. The U.S. Small Business Administration (SBA) has a number of great resources to help you shape your business plan. Look for local non-profit organizations as well for additional support, as there are many additional groups focused on helping entrepreneurs flourish.
2. Be Prepared with Credit & Cash
When you are nurturing an idea and starting to think about a business plan, check to see your current credit score. If you have a Fidelity Bank personal banking account, you can do this in just a couple of clicks through online banking or the mobile app. There are specific steps you can take to improve your credit score if it is not where you want it to be. A strong credit score will directly correlate to the rates available to you.
Related: Read more about what is involved in your credit score.
Saving up reserves and having cash on hand is another part of being prepared to take the small business leap. Proactively saving in anticipation of seeking a business loan will pay off in the terms of agreement. It is never too early to start working with a banker to determine a goal amount for your working capital. Keep up a solid (and steady) employment to demonstrate your stability. And make sure to not forget planning for personal expenses in addition to (and separate from) your business expenses.
3. Get an Accountant You Trust
There are many benefits to having the support of an accounting firm or CPA. You will be guided toward setting up the Limited Liability Company (LLC) according to your state requirements and regulations. Or if an alternative type of business formation is better suited to your needs, a CPA can help you determine this as well. Your accounting partner can help you determine the estimated operational costs (that will be part of your business plan) and lay the foundation for your ongoing management. Understanding your business financials, how to manage debt, and how to properly track income will set you on the best path for success. If you need an accounting firm, we recommend starting your search with a referral. Reach out to a fellow business owner in your area or contact us and we’ll be happy to help you start your search!
Your community bank is a valuable resource when you are ready to seek a loan. Here at Fidelity Bank we are ready to help! As a fellow member of the local area, we can make decisions outside of the long list of checkboxes and standard forms. Want to learn more or start a conversation about your lending options?
Contact Our Lending Team
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