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V O L . X X V N O. I V F E B R UA R Y 1 8 , 2 0 1 9 22 I f you own a business, you know what it's like to see — and want to seize — an opportunity. And often, such oppor- tunities require an infusion of capital. By applying a smart business loan to a smart business idea, you can jump on that opportunity, buy that equip- ment, grow your business and simply accomplish more. A commercial loan can provide a business a buffer for work- ing capital, allow owners to purchase inventory, develop a prototype, staff up for a new initiative, secure commercial real estate and much more. All of that said, many new business owners can find the process intimidating. ese steps should insure a smooth path toward loan approval. 1. Build your team If your business is ready for a loan, then it's also time for an accountant. Most large financial decisions have tax implications, and hiring a CPA will help you tighten up your bal- ance sheet and ensure your financials are current, including details on your company debt and assets, as well as accounts receivable or accounts pay- able aging reporting. All of this will make it easier for you to complete loan paperwork. And on a larger scale, your CPA and business banker, as a team, can empower your business to grow at a pace that makes sense and meets your long-term goals. 2. List your wants and needs Before meeting with a business banker, write down what your business is try- ing to achieve with a loan. Are you in growth mode? Do you need equip- ment, to hire a manager, or a buffer for accounts payable? Perhaps you need funding for new inventory, working capital while waiting to collect on your accounts receivable or your lease is up in a few months and you need a new space. e more we know about your business, the more we can help. Write it down! 3. Pull together your tax returns Let's say you're interested in a loan because your business needs a home. You'll definitely need to provide tax returns, but requirements can vary based on your business type and the type of loan you are applying for. Generally, most banks will ask for the last three years of federal income tax returns. 4. Do your homework When reviewing properties to pur- chase, look beyond the brochure or listing sheet. Many times, business owners will purchase more space than their business requires and will rent out the extra square footage. Ask for copies of signed tenant leases and the last three years of the seller's Schedule E tax return information. You're not requesting personal information here — you just want to see revenue and expenses on the property to better understand the true potential rental income. is level of detail will help you make an informed decision and a strong long-term purchase. 5. See if SBA is an option for you For a commercial real estate loan, most community banks will want the business to put 20% down. Many small-to-medium sized businesses simply don't have those funds on hand, but have significant cash flow to make loan payments each month. In those cases, SBA-504B financing can be a great solution. With an owner- occupied property, you may be able to put down as little as 10% and receive a 20-year fixed rate on the SBA portion of the financing. And you can still work with your local banker — the community bank finances 50%, and the SBA finances 40%. 6. Remember that you're the big-picture expert If you're feeling intimidated about what a business banker will think, remember this: while we can look at your num- bers and understand certain things, it's you — the business owner — who has grown the business. You know the stories behind those numbers; and we want to hear those details. Oh, and also — we really want to help. Small business is the backbone of Maine's economy, and in the financial community it's our mission to help you succeed. A vibrant business community means a vibrant community overall, and we love seeing you grow. Kim Donnel ly, senior vice president and director of business banking at Gorham Savings Bank, can be reached at kdonnelly @ g or hamsav ingsbank.com March 1st at Holiday Inn by the Bay PORTLAND, MAINE REGISTER NOW! nebrewsummit.com NEW ENGLAND'S BIGGEST BEER INDUSTRY CONFERENCE PRESENTED BY Prepare for a business loan B Y K I M D O N N E L L Y H OW TO

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