Taylor Symes special for the citizen
It doesn’t matter if you are a brand new business or an existing business looking for funding, everyone can get funding in one way or another. As a technical specialist with the Cayuga Economic Development Agency, I underwrite business loan applications for the city and county small business loan programs. In addition to underwriting, I work hand in hand with the Cayuga County Industrial Development Agency and Auburn Industrial Development Authority. In these difficult times of COVID-19, the loan applications that are coming to my desk are from businesses trying to get back to normal. I also support startups and companies that need help with strategy and financial assistance. For businesses unsure of how to get a business loan, here are some guidelines for creating a loan application from an underwriter’s perspective:
Have an up-to-date business plan.
Being able to provide a business plan when applying for a business loan is a key part of underwriting. Whether it’s a brand new business or an existing one, a business plan is needed. As an underwriter, I pay close attention to a few main sections of the business plan: the executive summary, business objectives, market analysis and financial projections. The summary gives a big picture of what the business is, and the goals give me an idea of where the business wants to go.
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Different types of financing.
There is a surplus of different financing options being announced to businesses. Most start-ups become very overwhelmed with the options presented to them. For example, small businesses may need an equipment loan. I would recommend a small loan just for this purpose. You never want the term of the loan to be longer than the life of the equipment. When large companies are looking for a bigger loan, the first question I ask them is: have you tried to get bank financing? Once they tell me they’re eligible, we go through a series of questions that will help determine a correct funding option for them. Some businesses may just need help managing their cash flow at a certain time of the year. In this case, a line of credit may be their best option instead of a loan that requires them to pay larger payments for a substantial period of time.
For start-ups, financial data will most likely be projections of future sales and income, as they will not have historical financial data to provide. This is where market analysis will help support estimated sales and growth in the years to come. For an existing business, historical financial statements along with market analysis will be the sources that will support the sales and expected revenue of the business for years to come.
As an underwriter, I almost always look to see if the owners are making a capital contribution to the business. It is a sign of commitment to match funding from a lender. Most financings will require some sort of collateral as collateral for the loan. Collateral can be personal or business assets.
Know where to find help.
Whether you have a start-up or an existing business, there are many sources of assistance available for business owners who meet a variety of business needs. A good place to start is to meet our CEDA team. Our assistance is always free and confidential. Contact our offices today for a one-on-one session to help turn your business ideas into a strategic plan.
Taylor Symes is the Economic Development Technical Specialist for the Cayuga Economic Development Agency. She can be contacted at (315) 252-3500 or [email protected]