Small business loan environment not impossible

Craig bankers advise entrepreneurs on how to successfully secure a startup loan

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“The bottom line is we can’t tax our way out of this recession and we can’t cut our way out of this recession. We have to grow our way out of this recession.”

Betsy Nauman-Cook, director of the Craig/Moffat Economic Development Partnership

Throughout the 2012 campaign season one theme has dominated the political landscape more than any other at both the state and national levels: The economy.

While members on one side of the aisle champion a plan to cut the deficit through increased taxes, the other side argues for less government spending.

But many Craig business and financial professionals do not believe either party has a firm grasp on how to improve the economy and put Americans back to work.

“The bottom line is we can’t tax our way out of this recession and we can’t cut our way out of this recession,” said Betsy Nauman-Cook, director of the Craig/Moffat Economic Development Partnership. “We have to grow our way out of this recession.”

The recipe for growth, Nauman-Cook added, means increasing access to capital for entrepreneurs and business owners.

But a recession can influence the public’s perception about the availability of funds, Nauman-Cook added. Particularly when so many people are living on tight budgets at home.

“The recession and beliefs about access to capital can play a huge role in economic development,” Nauman-Cook said. “As a culture we get so hung up about money that people are so afraid to even walk into a bank to ask for a loan.”

Though the banking industry isn’t approving loans willy-nilly, Dave Fleming, president of Yampa Valley Bank in Craig, said it isn’t impossible for existing small business owners, or even entrepreneurs, to access capital.

“Individual circumstances vary, but it’s really no different from someone who is looking for a car loan,” he said. “If a person has established credit, adequate cash flow and some capital to put into a new business, then it’s a fairly easy deal.

“If you have no capital of your own and you don’t have adequate cash flow, then it is a little more difficult.”

One of the major factors that separate a successful loan application from an unsuccessful one is the amount of preparation people put into their business idea before meeting with a lender.

Alisa Corey, president of the Craig branch of Bank of Colorado, said part of that preparation is constructing a solid business plan that focuses on marketing the service or product and that sets realistic goals based off the average rate of growth of similar companies.

It’s also not a bad idea for entrepreneurs to keep working while starting their own business.

“If it’s possible, don’t quit your day job while fostering your new business,” Corey said. “That’s going to help so much to show an income stream while you’re getting your startup off the ground.”

But at the end of the day Corey, Fleming and Nauman-Cook all agree that there is nothing more valuable than knowledge.

“Even if a bank can’t give you a loan right away, it’s never a bad thing to talk to someone about a loan because they may be able to give you other ideas on how to get your dream started,” Fleming said. "From the bank’s standpoint, you never know what a person might turn into. If a young person starting out in life or someone just starting in the business world has an idea that makes sense, they can become a very strong customer down the road.

“But nothing is going to happen if you don’t ask for advice.”

Joe Moylan can be reached at 875-1794 or jmoylan@craigdailypress.com.

Comments

tysonsteele 1 year, 9 months ago

There are so many business owners turned down by banks. A lot of them are actually fully capable of handling a loan. As this article points out, “As a culture we get so hung up about money that people are so afraid to even walk into a bank to ask for a loan.” Unfortunately, it's true.

What a lot of people don't realize is that there are thousands of lenders out there. Too often, to look for a loan, a business owner starts with the bank where he keeps his personal finance - but this is not the place to start. The underwriting process (the process that defines whether you qualify for a loan) is done toward the end of the loan and is often so strict that the bank turns you down. If you get rejected at this point, you have to start all over with another bank.

That said, it's best to know which lender with finance you BEFORE you start. I've personally used a few of the free loan matching sources out there. Some of the tools cover different footprints, but I am aware of one that serves Colorado business owners. www.lendio.com

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