By Gina Blitstein

The SBA has developed a number of financial programs that address the various needs of small businesses. If you’re seeking a loan to support your business’ growth, it will behoove you to have your financial “ducks in a row” before seeking financial assistance. The organization suggests you conduct a self-evaluation of your business’ financing needs before reaching out to lending institutions. They include the following:

  1. Do you need more capital, or can you manage existing cash flow more effectively?
  2. How do you define your need? Do you need money to expand or as a cushion against risk?
  3. How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money when you’re under pressure.
  4. How great are your risks? All businesses carry risks, and the degree of risk will affect the cost and availability of financing alternatives.
  5. In what state of development is your business? Needs are most critical during transitional stages.
  6. For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
  7. What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.
  8. Is your business seasonal or cyclical? Seasonal needs for financing generally are short-term. Loans advanced for cyclical industries, such as construction, are designed to support a business through depressed periods.
  9. How strong is your management team? Management is an important element assessed by lenders.
  10. How does your need for financing mesh with your business plan? If you don’t have a business plan, make writing one your first priority. All capital sources will want to see your business plan for the start-up and growth of your business.

Knowing how you want to expand and fully preparing yourself to address these questions will enable a lender to best help you obtain the financing you need for the growth you desire.

Gina Blitstein combines her insight as a fellow small business owner with her strong communication skills, exploring topics that enhance your business efforts.

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank.