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We have a winner!
In our very first blog post a month ago, we offered a special gift pack for the first person who gave us a question related to small business. The winner is Dani Weinstein, a past HP colleague and fellow UC Davis MBA alum of Tina’s. Thanks for being a reader and for participating in our contest – look for your Starbucks gift card in the mail soon!
Here is the winning question: How are small businesses managing with the financial meltdown in securing sufficient financing & loans to get their businesses off the ground?
Excellent question Dani, and of course of interest to most small businesses. In an interesting coincidence, our bank manager called us last week to set up an appointment with us to find out more about our business and to see if there were any loan products they could interest us in. Here are the options we were presented:
1. An overdraft line – this is straightforward and it has come in handy when Accounts Receivables time increases. It has a moderate interest rate and only kicks in when needed.
2. For larger amounts, they also have a line of credit called the Cash Flow Manager. Generally you will qualify for 20-25% of your annual gross receipts. It only takes a couple of weeks to approve and has a low interest rate.
3. The last option was actually the one I had gone in to ask about, and that is SBA loans. With all the press these loans have been getting lately I thought for sure this would a product the bank would be pushing. Actually it was quite the opposite. They said SBA loans are usually the last resort for funding– they take upwards of 6-9 months to approve and require a large amount of paperwork. Additionally, they said, the criteria to actually get an SBA loan approved has tightened up just as on most loans.
There are other SBA products that are available that you can get much quicker, but they are for small amounts and can only be used to pay off existing debts (i.e. credit cards or other loans). You can check with your lender or the SBA directly about loan options such as ; ARC, 7a, 8a and others.
By the way, if you need a good banker, I recommend Lois Coady at the Roseville branch of US Bank – she made me feel like a valued customer.
Here is the winning question: How are small businesses managing with the financial meltdown in securing sufficient financing & loans to get their businesses off the ground?
Excellent question Dani, and of course of interest to most small businesses. In an interesting coincidence, our bank manager called us last week to set up an appointment with us to find out more about our business and to see if there were any loan products they could interest us in. Here are the options we were presented:
1. An overdraft line – this is straightforward and it has come in handy when Accounts Receivables time increases. It has a moderate interest rate and only kicks in when needed.
2. For larger amounts, they also have a line of credit called the Cash Flow Manager. Generally you will qualify for 20-25% of your annual gross receipts. It only takes a couple of weeks to approve and has a low interest rate.
3. The last option was actually the one I had gone in to ask about, and that is SBA loans. With all the press these loans have been getting lately I thought for sure this would a product the bank would be pushing. Actually it was quite the opposite. They said SBA loans are usually the last resort for funding– they take upwards of 6-9 months to approve and require a large amount of paperwork. Additionally, they said, the criteria to actually get an SBA loan approved has tightened up just as on most loans.
There are other SBA products that are available that you can get much quicker, but they are for small amounts and can only be used to pay off existing debts (i.e. credit cards or other loans). You can check with your lender or the SBA directly about loan options such as ; ARC, 7a, 8a and others.
By the way, if you need a good banker, I recommend Lois Coady at the Roseville branch of US Bank – she made me feel like a valued customer.
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