By Kathryn Mykleseth
The Honolulu Star-Advertiser
WWR Article Summary (tl;dr) Women and Money. When it comes to obtaining a loan for your business what is the best way to deal with lenders? Jane Sawyer, District director of the Hawaii District Office for the SBA sits down for a Q&A to take a look.
Answer: It’s not unusual for startup costs to be higher than expected for a new business and it can take some time to build up the revenues to meet the projected cash-flow targets. This reality alone can make lenders wary of making a loan to a venture without a documented track record.
As a result, small-business owners may be reluctant to approach a lender or be uncomfortable knowing what to ask for and how to clearly articulate their funding needs. It can be a big undertaking to put together a viable financing application to get a loan approval. To increase the likelihood of a positive response to your funding request is to be prepared and submit a complete loan application with appropriate documentation. Free expert assistance is available from U.S. Small Business Administration resource partners like the Hawaii SBDC, SCORE and the Mink Center for Business and Leadership, a women’s business center in Honolulu.
A: Before you seek financial assistance, you should thoroughly assess your current financial situation to determine your capital needs and cash-flow condition.
Include your business vision, history and background, resumes for the principal owners and/or managers, marketing plan, and financial information including projections of income, expenses and cash flow. As a new or expanding company, the research and assumptions you used to develop those financial projections should be clearly outlined as well. You should also be sure to report your investment of any capital and resources into your venture to confirm that you have “skin in the game.” All lenders will want to see a solid, lean, well-thought-out business plan to support their credit decision.