In my quest to learn more about reachmore’s business coaching clients, I asked them what their number one roadblock to hitting their 2010 goals was. An overwhelming majority said that raising capital was the thorn in their side.
Well my beloved readership, I pulled out all of the stops for you, and asked Dawn DeRidder, Vice President of SBA Lending at M&I Bank to give us her hottest tips to securing fast cash!
From Dawn’s mouth, through my fingers, to your eyes; here is your yellow brick road to raising capital quickly:
1. Go to the Bank Now – If you own an existing business and are looking for a line of credit so you can expand, go to the bank right now. If you are starting a business, finish your business plan before going to the bank (for help with business planning contact SCORE or IN SBDC). Don’t get caught in the trap of using personal credit cards to get quick cash – you’ll end up paying through the nose in interest, and will never be able to pay it off. You may think that the banks aren’t lending, but they are. Go visit one today!
2. Ask for referrals – These aren’t the referrals from your friends to their favorite banker, this is a referral from the banker who turned you down. I know, right? Get a referral from someone who rejected you? (Maybe I should’ve tried this technique with the ladies in college…) If you ask, the best banks will give you a referral to outside funding sources that may be able to get you some money – even if your application with the current bank has been turned down!
3. Gang up on the Banks – Don’t take the preceding statement the wrong way… I am NOT advising that you join a gang and rob a bank. What I am advising is that you apply for a loan at 3 or 4 banks at the same time. This way you will are guaranteed to get money faster than if you applied to one bank at a time.
4. Be Prepared – When you go to the bank, the key elements to have with you are 3 yrs of business tax returns, a current balance sheet and income statement, current personal financial statements, and 2 years of personal tax returns. For good measure, you may also want to take copies of documents necessitating your need for more capital (ex. copies of expansion contracts, changes in legislation that promote industry growth, etc.)
5. Throw Pinocchio Away – Be honest with your banker about issues that may impede your ability to get a loan. Some of these problems could be cash flow issues, the fact that you’re about to lose a contract, or credit problems, etc. It helps when you address this upfront, so the loan can move forward faster. Being honest also shows a willingness to work with the bank, and gives bankers the tools to structure the deal appropriately.
So there you have it – the best tips of the trade from SBA Super-Woman Dawn DeRidder! Follow the tips above, if you want to grow your business quickly this year.
Dawn DeRidder is the Vice President of SBA Lending for M&I Bank. If you would like immediate information on how to secure funding for your small business, email dawn.deridder@micorp.com.
Jamar Cobb-Dennard is the Vice President of Business Development for reachmore, which provides leadership coaching for small business and executives. Email Jamar at jamar@goreachmore.com for the latest on reachmore’s newest seminar, Launch.