- Author: WKU SBDC
- Author: Monday, February 8th, 2016
February 2016 Newsletter - WKU Small Business Development Center
5 Steps to Getting a Business Loan
BY: MILLER SLAUGHTER
Cash is the fuel that powers small business. As a small business owner you know that if you start to run low on cash your whole business begins to slow down. In fact, lack of cash is the number one reason for small business failure. So how do you ensure that your small business has enough cash to help it grow? Many times this means you will need a loan to help start or grow the business. So how can you improve the odds of you getting the loan needed? Here are a few tips from the WKU Small Business Development Center.
- Keep Accurate Business Records - You must have a strong record keeping system in place that tracks your revenues, expenses and profits. Not only is this information vital to helping you manage the business but potential lenders will want to review your performance. If you fail to keep good records, potential lenders may become concerned about giving you a loan.
- Prepare Your Business Plan – Both Start-Ups and existing businesses should have a business plan. The plan is a very useful tool to help you define and communicate key aspects of the business to the lender. The plan will help define how much money you need, what you will use it for, and how you will pay it back. As you might guess, these are critical questions the lender will want answered before they approve the loan.
- Prepare to Meet with Lenders - You should prepare before you meet with lenders. Develop a short “pitch” to explain the business and loan needs to the lender. Assemble key information that the lender is likely to need such as 3 years of both personal and business tax returns, a personal financial statement, the business plan including lease agreements and other key documents and the financial projections. Practice your “pitch” so you can confidently explain your needs and answer questions the lender is likely to ask.
- Identify Potential Lending Sources – You should develop a short list of potential banks with whom you might want to meet. If you have an existing personal or business banking relationship this is a good place to start. You might want to consider other banks also. Know that different banks have different approaches to lending. Local community banks are often a good source of small to medium size small business loans.
- Make an Appointment - Loan officers are often very busy, so respect their time. Make an appointment, show up on time and make your pitch! Remember to be prepared by being able to explain the business needs and by providing the loan officer with all the information you have assembled.
This process may sound like a lot of work, and it can be. We strongly suggest you contact your local Small Business Development Center to get help. The SBDC can help with the entire process and greatly enhance your chance for getting the loan you need. The WKU SBDC services South Central Kentucky and can be reached at 270-745-1905.
Recent News and Events
BY: CINDY THRASHER
Monday, March 14, 2016 Workshop: Lunch and Learn: Social Media and Online Marketing 12:00-1:00 p.m. at the Glasgow-Barren County Chamber of Commerce, Glasgow, KY
To register for one of our workshops, visit our website at www.wku.edu/sbdc and click on “View Upcoming Workshops.” All workshops this are free to attend and are open to anyone.
Funded in part through a cooperative agreement with the U.S. Small Business Administration. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance. Contact Cindy Thrasher, 247 Double Springs Rd., Bowling Green, KY, 270.467.7154.
Business in The Know
Becoming an Effective Leader in 2016
BY: NATHAN LEE
What is leadership? Many business owners are going to be asking themselves that question as they look at setting goals for their organization for 2016. Setting goals is one thing, but convincing your employees to adopt and complete those goals is another. One of the best ways to help your organization achieve goals for 2016 is to utilize your influence as a business owner.
Leadership has been defined many different ways by many different people. The best definition I have ever heard was this, “Leadership is the art of getting others to want to do something you are convinced should be done.” How does this definition help business owners become more effective in their leadership in regards to goal setting? Let’s break it down:
1) “Art” – Leadership is not a science. It is an art. And by that we mean that there is not one perfect formula that we can replicate to create the perfect leader. Many factors might cause one particular successful leader to fail in a different environment: business industry, history of management, personality traits of employees, etc.
2) “Getting others” – A successful leader in 2016 will not do everything themselves. Even if they had the time to, a business owner should be a master at delegation. To do this effectively, an owner must prioritize the tasks, communicate them properly, and staff the right personnel.
3) “Want to do something” – There are a few types of leaders. One group is the authoritarian leader, who forces projects and tasks upon their following. Another group is the transformational leader, who inspires followers to action. This is the kind of leader a business owner should strive to be. Only by convincing your employees to want to accomplish a goal will the business achieve organizational success.
4) “You are convinced” – A shared, inspired vision is only as good as the source it came from. If you, as a business owner, don’t believe your goals for 2016 are great goals, your employees will have no reason to want to accomplish those goals. The goals and vision for 2016 should be shared, coming from the top-down and valued by the business owner.
Setting goals for your organization is simple. Setting great goals is harder. Accomplishing those great goals is something else. An organization needs a leader to guide them organizational success, by empowering them to want to complete the goals that are important to the business.
Small Business of the Month
Bowling Green, KY
N-Tense Sports is a locally owned and operated paintball field, located in Bowling Green, KY. With new management and ownership, N-Tense focuses on bringing the consumer an incredible "n-tense" experience, all while keeping it affordable and reasonable. With 3 different fields, N-Tense Sports is able to accommodate your group and provide options that will keep you having fun for hours. Congrats to N-Tense Sports for being WKU SBDC's Small Business of the Month!
WKU Small Business Development Center
2413 Nashville Rd, Bowling Green, KY 42101