Taylor Symes special for the citizen
It doesn’t matter if you are a brand new business or an existing business looking for funding, everyone can get funding one way or another. As a technical specialist with the Cayuga Economic Development Agency, I support business loan applications for the city and county’s small business loan programs. In addition to underwriting, I work hand-in-hand with the Cayuga County Industrial Development Agency and the Auburn Industrial Development Authority. In these difficult times of COVID-19, the loan applications that come to my desk are for businesses trying to get back to normal. I also support startups and companies that need help with strategy and financial assistance. For businesses that aren’t sure how to get a business loan, here are some guidelines for creating a loan application from an underwriter’s perspective:
Have an up-to-date business plan.
Being able to provide a business plan when applying for a business loan is a key part of underwriting. Whether it’s a brand new business or an existing one, a business plan is necessary. As an underwriter, I pay particular attention to a few main sections of the business plan: the executive summary, business objectives, market analysis and financial projections. The summary provides an overall view of what the company is all about and the goals give me an idea of where the company wants to go.
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Different types of financing.
There is a surplus of different financing options being advertised to businesses. Most startups are overwhelmed by the options presented to them. For example, small businesses may need a loan for equipment. I would recommend a small loan just for this purpose. You never want the loan term to be longer than the life of the equipment. When large companies are looking for a larger loan, the first question I ask them is: have you tried to obtain bank financing? Once they tell me they are eligible, we go through a series of questions that will help determine an appropriate financing option for them. Some businesses may simply need cash flow assistance during a certain time of year. In this case, a line of credit may be their best option instead of a loan that requires them to pay larger payments over a substantial period of time.
For start-ups, financial statements will most likely be projections of future sales and revenue, as they will not have any financial history to provide. This is where market analysis will help support estimated sales and growth in the coming years. For an existing business, historical financial statements along with market analysis will be the sources that support the business’s expected sales and revenue for years to come.
As an underwriter, I almost always look to see if the owners are making a capital contribution to the business. It is a sign of commitment to match financing from a lender. Most financing will require some sort of collateral as security for the loan. Collateral can be personal or business assets.
Know where to find help.
Whether you have a startup or an existing business, there are many sources of support available to business owners that meet a variety of business needs. A good place to start is to meet our team at CEDA. Our assistance is always free and confidential. Contact our offices today for a one-on-one session to help turn your business ideas into a strategic plan.
Taylor Symes is the Economic Development Technical Specialist for the Cayuga Economic Development Agency. She can be reached at (315) 252-3500 or [email protected].