1. Division of Economic Development Loan Programs Michelle (Miki) Rodekohr Loan/Collection Officer III

2. Getting To The Top Takes Time Page  2 PREPARATION… BE PREPARED:  Is your loan application complete?  Include everything on the checklist.  If you‘re not sure, ask questions.  Have you signed in all places on all forms?  Don‘t forget the application fee!

3. Getting To The Top Takes Time Page  3 Know What You Are Looking For:  Exactly what do you need loan funds for?  Do you have a WRITTEN business plan?  Starting a new business?  Expanding your small business? HAVE A PRACTICAL PLAN…

4. Getting To The Top Takes Time Page  4 CAPACITY - M easures a borrower‘s ability to repay a loan by comparing income against debt. CONDITIONS - As interest rate and amount of principal will influence the lender‘s desire to finance the borrower. CHARACTER - This refers to a borrower‘s reputation. 1 THE “FIVE C’s” OF CREDIT… CAPITAL - How much money will you invest into your project? 2 3 4 5 COLLATERAL - As property or large assets, helps secure the loan.

5. Getting To The Top Takes Time Page  5 THE “FIVE C’s” OF CREDIT… CAPACITY:  How do you intend to repay the loan?  Do you earn ENOUGH to repay the loan?  Is your income stable?  Is your cash flow seasonal or on a regular basis?  What is the probability of your income continuing?  DIVERSITY of income?

6. Getting To The Top Takes Time Page  6 THE “FIVE C’s” OF CREDIT… CAPITAL:  How much money will YOU invest in the project?  Do you have funds for down payment, closing costs?  Will you have money to fall back on?  Will you have funds left for living expenses?  Did you leave room for error?

7. Getting To The Top Takes Time Page  7 THE “FIVE C’s” OF CREDIT… COLLATERAL:  What will be security for the loan?  Loan amount will be based on a percentage of value.  Will you offer additional collateral if needed?  Loan term may be based on physical life of the collateral.  How easily can the collateral be sold?

8. Getting To The Top Takes Time Page  8 THE “FIVE C’s” OF CREDIT… CONDITIONS:  What is the overall condition of the economy or industry?  Does the plan for repayment reflect true conditions of business?  Is the market on the rise or falling?

9. Getting To The Top Takes Time Page  9 THE “FIVE C’s” OF CREDIT… CHARACTER - CREDIT:  Impression you make.  Do you pay your loans on time?  Do you have derogatory credit? Collections or judgments?  Education or experience in the industry?  Length of time at job and residence.  Are your IRS taxes filed and paid?

10. Getting To The Top Takes Time Page  10  How much do you need to borrow? Be realistic.  DO YOUR RESEARCH – Are your projected income and expenses realistic?  If you can show savings track record, it greatly improves your position.  Know what is on your credit report. If there are errors, ensure they are corrected before your lender does its own check.  Equifax800-685-1111www.equifax.comwww.equifax.com  Experian888-397-3742www.experian.comwww.experian.com  TransUnion800-888-4213www.transunion.comwww.transunion.com TIPS…

11. Getting To The Top Takes Time Page  11  If you have limited credit or are a first time borrower, consider using a guarantor. A guarantor underwrites the loan, may pledge collateral, and agrees to pay if the borrower is unable to meet repayments.  ASK QUESTIONS – Talk to successful folks in the business.  BE PREPARED TO WORK HARD! TIPS CONTINUED…

12. Getting To The Top Takes Time Page  12  Division of Economic Development Small Business Assistance Center http://commerce.state.ak.us/dnn/ded/DEV/SmallBusinessAssistanceCenter.aspx  Small Business Development Center http://aksbdc.org/  Small Business Administration http://www.sba.gov/  Alaska Business Development Center http://www.abdc.org/ BUSINESS RESOURCES…

13. DIVISION OF ECONOMIC DEVELOPMENT Page  13 OFFICES: Anchorage: Atwood Building (downtown) Juneau:Vintage Park in the Valley 1-800-478-LOAN Please visit us at: https://www.commerce.alaska.gov/web/ded/ for information, loan applications and news

14. Page  14 And…One more REMINDER! GETTING TO THE TOP TAKES TIME!

15. Page  15 Do You Have Any Questions?