Financing options for you and your business

So, you want to grow your business?

After years of hard work to develop demand, you have grown and are at a crossroads. Are you continuing on your current path or are you investing in yourself and this new opportunity to change the trajectory of your business? With small business financing, you can take advantage of this new opportunity.

These situations are not unique to any particular company. But is there a sensible approach to knowing if a bank meets your needs? If so, what financing options exist to help your business grow or expand?

Banks are usually the right solution for business financing if:

  • The company has been in business for more than 2 years
  • The business is profitable and can support the payments on the necessary debt
  • Owners have industry experience and a good credit history
  • The business has collateral to back the loan

The five Cs

In the banking industry, this list is known in short form as “The Five Cs of Credit:”

  • Conditions
  • Cash flow
  • Capital
  • Solvency
  • Character and warranty

This is ideal if all five conditions are met, but it is not always necessary. If your business is weak in one or two of the five Cs, a bank may still be able to help you out by using an enhancement, such as a Small Business Administration (SBA) guaranteed loan to support your business.

How do SBA programs help finance small businesses?

SBA programs allow the bank to offset risk while ensuring that we are not doing anything too risky. Let’s look at some examples:

  • Maybe your business needs new equipment for an expansion opportunity. A bank’s conventional loan term of 5 years can make payments too high to be feasible. However, an SBA loan with a 10-year term could make payments more affordable.
  • You are an experienced manager for a business you love and you have the opportunity to buy the business. With little collateral, we can use an SBA loan for the purchase, lending far more than the value of the collateral.
  • You dream of starting a business. You have a long track record of successful management in this industry, you have a strong down payment, you have strong guarantees, and you have outside income that further reduces risk. However, you have no proof of profit and cash flow history. This is another example that an SBA loan could help with financing.

To Hillcrest Bank, we strive to get to know you, understand your goals and find solutions to help you achieve them. Our mission every day is to find common sense solutions to help your business. Relationships start with getting to know each other. We’ll get to know you and your business, and once we understand your dreams and goals, we’ll help you find solutions. It can be a conventional bank loan, an SBA loan, a home equity loan, or an introduction to a community partner. Our job is to learn, understand and help achieve. We call it “Where Common Sense Lives” banking.

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