HomeMy WebLinkAboutBuilding Business Basics Workshop #4Presented by:
Trenton Haman
Sr. Lead Credit Analyst, MidWestOne Bank
Commercial Lending & Financing
•Work in Commercial Credit Administration department
•Review majority of the commercial financing or funding requests for the
bank
•Work in tandem with Commercial Lenders to package a funding request
that benefits both the bank and the customer
Introduction
•Approaching a Commercial Lender
•Documents and Materials Needed
•Financing Considerations
•Financial Programs Available
Workstation Overview
•Basic business plan or purpose
▫Does new venture fit a need or gap in the market?
•How much funding do you need
▫Use of funds?
Operating expenses, or inventory, or equipment purchases, etc.
▫Justification – Any market analysis? Work orders or purchase agreements?
Income/Expense projections?
•Bank: Financing Resource vs. Investor
Approaching a Commercial Lender
•Personal Financial Statement
▫Listing of assets, liabilities, net worth, income level
•2-3 years of Tax Returns
•Credit Report – typically 620 and above
•If available: Invoices, purchase agreements, expense projections
Documents and Materials Needed
•Financing Structure: Line of Credit vs. Term Loans
▫Working capital? Purchasing equipment or real estate?
•Cash Equity or Down Payment
▫25% - “Skin in the game”
•Repayment Terms
▫Interest rates, amortization
•Primary and Secondary Sources of Repayment
Financing Considerations
•Small Business Association (SBA)
▫https://www.sba.gov/
▫SBA provides a number of financial assistance programs for small
businesses that have been specifically designed to meet key financing
needs, including debt financing, surety bonds, and equity financing
▫Loan Programs
https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs
Most common include: Small Business 7(a), CDC/504, and Microloans
See related handout
Financial Programs Available
•City of Iowa City
▫https://www.icgov.org/financialassistance
▫MicroLoan Fund – to provide low and moderate income entrepreneurs with
access to sufficient economic and social opportunities by providing them
with limited capital to assist with their start-ups and expansions
▫Application available online
•Engage a commercial lender, have documentation available
•Reason for financing or use of funds
•Be comfortable with repayment terms
•Embrace available programs such as the SBA and City sponsored
•Questions?
Conclusion & Questions
•Niki Prom, Commercial Banking Officer
▫102 S. Clinton St, Iowa City
▫nprom@midwestone.com
▫Ph. 319.356.5822
Contact