Why do I need a business plan?
Just as you would not travel to unknown parts of the world or country without a map, a business plan is a “map” or guide to starting and running your business. Our experience shows us that most business lenders will require this document as the first step in a loan approval process. If you need assistance in developing a business plan, contact ATW Miller Group, and we can refer you to a variety of options. The business plan should include the following:
- Identify the resources being brought to the business to indicate success potential. This could include previous or existing experience, human resources expertise, reputation, etc.
- Identify the market landscape and determine whether there is feasibility of success
- A description of the products or services
- The management structure, which will operate the business
- A description of the market to be served such as geographic area, and the demographics of the target customer
- An industry analysis including competition, environment, access to materials, regulations, etc.
- A pricing structure and financial projections, and what the projections are based upon.
- A promotion plan to create demand for the products or services.
What will my financial institution need when applying for a business loan?
- A business plan
- Three to five years of historical financial information. This may include personal and/or business tax returns, profit and loss statements and balance sheets.
- A year to date Financial Statement (a profit and loss statement and balance sheet)
- A Summary of Accounts payable and Accounts Receivable
- A personal financial statement
- A personal resume of the principals
- Skin in the game
Why did my bank turn my loan application down?
While lending institutions serve to provide funds to business enterprises they must minimize their risk to maintain stability, as they have a fiduciary duty to all of their customers. If your loan request was denied, a loan officer should explain the reasons behind the decision in a manner you understand. It may have been denied because the lending institution viewed the application as risky or incomplete based upon their lending policy or guidelines. Review the listing above to ensure that your application was complete. Before applying to another financial institution, we suggest you contact us to review your application and give you an opinion as to why it was declined.
How do I know if an SBA loan is right for my business?
An SBA loan is a good fit in a variety of scenarios. For example an SBA loan might be a good choice when a longer term is needed for the purchase of equipment or real estate, and a traditional loan does not fit. Or, because the government guarantees the loan, the interest might be less, which will free up cash flow making it a good fit. Or a lending institution may view your loan as more risky then they would traditionally fund. Therefore, an SBA loan, with a 75% loan guarantee may be a good solution for you as well as the lender. Each situation is unique and ATW Miller Group can assist you in determining if an SBA loan is appropriate.
I need to restructure my debt, where do I start?
The first step in restructuring debt is to do a comprehensive analysis of the total financial picture. This would include three years of tax returns, financial statements and balance sheets. ATW Miller Group has extensive experience in assisting businesses streamlining, reorganizing and ultimately restructuring their debt. It is not uncommon for this to be done as the business looks to expand, and will ultimately need one loan to service all of their needs.
How do I know which financing option is right for my business?
We recognize and understand that the world of finance can often be complicated. You know your business. We know finance. Our services include spending a great deal of time with you, to ensure that we thoroughly understand your business. There are numerous financing options available to businesses, and we work with you, to identify and secure the best option possible.
My business has secured some large projects, but we’re struggling with cash flow. Is there a strategy that would help?
Yes there is! This is a common challenge for businesses that are growing. We work with you to set policies to improve cash flow such as requiring deposits for a project. This may also be a situation where a loan is not needed but a line of credit may be a good fit. The good news from the lender’s point of view, is that the project is secured. ATW Miller Group can assist in finding a financial solution to bridge the gap from the contract to cash received.
How do I read my Profit and Loss Statement?
ATW Miller Group strongly advises that every business generate a monthly financial statement. This report is a snapshot of the fiscal health of the business for one month. It is in simple terms the businesses cash in, and cash out. The significant numbers to review are gross sales, cost of services or sales, gross margin, operating expenses, and net profit. Depending upon your business, it may not be uncommon to show a net loss for a few months during the year.
What does a Balance Sheet tell me?
The balance sheet is a snapshot of the net worth of the business from month to month and year to year. Ideally, you should see the net worth of the business increasing over time. This is the reason a lending institution will want to review at least three years of balance sheets and financial statements in order to determine a trend.
What do I look for in a banker?
ATW Miller Group’s philosophy is that your banker is one of your valued business advisors. For that reason, it is important for them to be responsive to your needs, care about you as a customer, taking the time to get to know you and your business. You need to feel comfortable with them and believe that they have your best interest at heart. In addition, consider them a resource for your business, and don’t hesitate to contact them with your questions or concerns about your business if things are not going well. They should be willing to share their knowledge and expertise.
What other types of funding might be available to me?
Small business grants