HORUS Academy : Access to Capital

Virtual Lunch & Learn ACCESS TO CAPITAL

PRESENTED BY:

FEATURING COMMUNITY PARTNERS National Black Business Support Corporation Republic Bank

SPEAKERS Pam Tedesco, National Black Business Support Corporation

Jay Kuilan, Republic Bank

Jay Kuilan, AV Manager Republic Bank

Pam Tedesco, President National Black Business Support Corporation

Are You Ready for Funding?

National Black Business Support Corporation

• Started as the Florida Black Business Support Corporation in 1988 (dba Access Florida Finance) • Added dba National Black Business Support Corporation • Flipped organization and formally incorporated as the National Black Business Support Corporation in 2017.

• NBBSC is an independent 501(c)(3) recognized nonprofit

Technical Assistance

Engage with our clients one-onone to identify where whey are in their business formation process, what their financial needs are and what the next steps for success on their journey are.

Technical Assistance • • • • •

Incorporation status Financial reports Debt schedule Amount of funding sought Use of funds

• • • •

Collateral available Credit score Credit issues Established banking relationship

Financial Reports If it hasn’t been reported, it didn’t happen.

• Accurately track business revenues and expenses through a separate business bank account. Reports will include Profit & Loss Statement, Balance Sheet, Accounts Receivable/Aging Report

Financial Reports • Balance Sheet - Snapshot of business’ financials at a specific point in time. Documents Assets (what you have) and Liabilities (what you owe).

• Profit & Loss Statement - Shows Revenues and Expenses over a period of time. Typically looking for the current YTD and last year’s full year.

• Accounts Receivable/Aging Report - Shows what additional income is due to your business but has not yet been received.

• Debt Schedule – Documents status of currently existing debts.

Funding Request • Be thoughtful – research what you need and what the funds will be used for. Don’t ask for $100,000 if $15,000 is really ok.

• Gather estimates for equipment.

• Create spreadsheet for business float to cover gap between performing work on a contract and time it takes to get paid from your customer.

• Build your case for how borrowing the funds will further advance the net revenues of your business.

Collateral Unsecured Loan – no collateral is needed.

Secured Loan – collateral is required, usually 60% • Real estate • Real property • Public contracts • Accounts Receivable

Credit Score & Credit Report Credit Score – snapshot of where you are at that point in time, ranges from 300 – 850. No rule for “excellent”, “good”, etc., but in general: Excellent: >800

Fair: 600 – 700

Very Good: 750 – 800

Poor: <600

Good: 700 - 750

Credit Score & Credit Report • Credit Report – detailed history of all the credit activity over several years. Includes current balances, monthly payment amount, monthly payment history, any delinquencies, outstanding judgements, etc.

• Free report 1x/year from each bureau

• Do your homework before you talk to a lender.

• You only have one time to make a first impression.

• Information sharing – can feel intrusive. Lender is making a determination relative to likelihood of loan payoff being successful; not a personal judgement of you or your business.

• Honest and open communication – lender is going to find out “dark secrets”.

• Commercial lender is a partner in your business’ success.

Why is relationship banking important?

Why is relationship banking important?

• Access to more favorable rates and loan terms • Fewer or lower banking fees • Access to service that improve cash flow speed • Strategic planning for future business endeavors

Benefits of a business loan or line of credit.

Underwriting Process •

Be prepared: • Normally Banks will ask for the following: • 3 years of personal taxes • 3 years of business taxes • Personal financial statement • Recent balance sheet along with a profit and loss

• The process can seem invasive, but the bank is trying to make the best decision for you and for the bank.

Jay Kulian jkuilan@republicbank.com Office: (813) 452-2984 Cell: 813-525-1948

Nontraditional Lenders

MORE FLEXIBILITY IN LENDING DECISIONS.

TAKE ON HIGHER LEVEL OF RISK – AT A COST.

GOOD LENDERS AND GOOD PROGRAMS; BAD LENDERS AND BAD PROGRAMS.

Merchant Cash Advance (MCA) Lender provides cash up front betting on future revenues. Not a “loan”, per se.

• Fast • Easy to get • Daily or weekly ACH drafts • Very high interest rate

Working Capital Loans

In business 6+ months

$10,000/month in average deposits

Provide bank statements

Credit 500+

Shorter term

Revolving Line of Credit • In business 6+ months • $10,000/month in average deposits • Provide bank statements • Credit 500+ • Weekly/Monthly payments • Short term – 6, 12 or 18 month

Accounts Receivable Financing

• Revolving line of credit based on unpaid invoices • Higher annual revenue ($1 million) • Not credit score based; rather, based on open A/R • Bi-weekly/Monthly payments • Term – 1 year • Interest rate – currently 10%

Term Loans • In business 2+ years • Provide bank statements, tax returns • Credit 660+ • Bi-weekly/Monthly payments • Term – 1 – 4 years • Interest rate – currently 8%

Equipment Financing • Can be start-up • Provide bank statements • Credit 650+ • Monthly payments • Term – 1 – 5 years • Interest rate – depends on credit, currently starting at 8%

Pam Tedesco, President Pam@NBBSC.org (850) 269-6896 (850) 545-4988 (mobile)

Q&A

Thank You for attending