Finance: Small Business Financing

Small Business Financing

By Lauren Caggiano

Capital. Funding. Investment. Whatever you call it, money is an essential aspect of starting and scaling a business. However, applying for a loan is not something to leave to chance. It requires a lot of attention to detail.

Michele Myers, a relationship manager with STAR Financial Bank with 30 years of industry experience, wants to save small business owners headaches by offering some tips on streamlining the loan application process and ultimately financing a venture.

First things first: Don’t overlook the fund-amentals.

“When people come to us with an idea, the first thing they need to do is really prepare — get a really good business plan in place,” she said. “They need to know what the business is going to look like.”

Along with a business plan, entrepreneurs need to concern themselves with a financial business plan.

“The biggest mistake I see is a lot of people don’t do the research,” she said. “They might have an idea and go to the bank with the goal of getting a loan, but they might not have any experience to support it.”

That’s why Myers stresses that aspiring business owners “bring something to the table” — in the form of collateral. They should expect questions like: “what kind of money are you planning on injecting into this business? “What kind of time are you planning on interjecting into this business?”

Myers also stresses that surveying the competitive landscape is an exercise that can pay dividends for all parties. For instance, say you want to open a hot dog stand in your neighborhood. This may or may not be prudent, depending on the circumstances and market conditions.

“There’s a lot of different businesses out there,” she said. “Do the research on that type of business. That type of business may have already been in that location three years ago and has failed. Or there might be one around the corner doing the exact same thing. You want to make sure that this (concept) will thrive in that area.”

You don’t have to go it alone when it comes to this business intelligence work. According to Myers, there are many entrepreneurial support organizations in the region that are willing to help in this way. For instance, the Indiana SBDC, which has 10 regional offices throughout the state, offers nocost business advising for entrepreneurs and small businesses. Advisors are available to provide free advising and disaster relief loan application assistance for those impacted by the COVID-19 pandemic. You can also check out fusenei.org, a hub for entrepreneurial support resources.

In general, Myers wants entrepreneurs or aspiring ones to use free or lowcost resources to their advantage.

“There’s a lot of other organizations out there that help companies start their businesses,” she said. “You come up with a good solid business plan, financial plan and make an appointment. Then you can present your business and tell them what you need. And they will decide whether that’s something they’re willing to lend on. So that’s a good way to get you started in lending.” a

Resource: STAR Financial Bank, Fort Wayne, starfinancialbank.com

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