1. Searching for Capital

2. 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 Searching for Capital

3. 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 Searching for Capital

4. Where will the money come from? Personal Savings Family and Friends Banks, Savings and Loans, Credit Unions Commercial Finance Companies Venture Capitalists Government Programs Searching for Capital

5. SBA Loans 7(a) Regular Business Loans 504 Loans (certified development company) Low Doc Loans SBIC Capital Access Loans (CAP) Others Searching for Capital

6. Line of Credit CommercialInventory Accounts Receivable Short-Term Business Loans

7. Other Types of Business Loans Medium-term Loans Long-term Loans Mortgages Real Estate Loans Equity Financing Searching for Capital

8. What kind of collateral will you need? Personal Assets Savings Accounts Life Insurance Policies Stocks and Bonds Co-Signers Lease Assignments / Warehouse Receipts Mortgages Searching for Capital

9. The 5 C’s of Credit Searching for CapitalCharacterCapacity CollateralConditions Capital

10. Preparing Your Loan Package Business Description Management Profiles Market Projections Purpose Amount Repayment Plans Financials Searching for Capital

11. 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 Searching for Capital

12. 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 Searching for Capital