General Business

Five Ins and Outs of How to Apply for a Small Business Loan

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How to Get a Small Business Loan in Five Easy Steps

Congratulations! You’re getting your small business off the ground and into a bright horizon. With the resources of a small business loan, you’ll have the adequate funding to maintain a prosperous business. Whether you own a pet franchise, independent business, or are delving into a new start-up—having the financial backing helps.

This article helps summarize the process. There is a lot of paperwork involved in loan application process whether through a bank, credit union, or the SBA. Organization is crucial. You will need to clearly state why your business needs a loan and determine the amount you will need to take out.

Be prepared to answer the following questions:

  • Why are you applying for this loan?
  • How will the loan proceeds be used?
  • What assets need to be purchased, and who are your suppliers?
  • What other business debt do you have, and who are your creditors?
  • Who are the members of your management team?
  • Questions relevant to your personal background.

Organize all Required Documents

Before investing precious time and resources into the application process, first, procure all the documents you will need. This will expedite the whole process.

To start, you will need to check your personal credit and your business’s credit. An SBA 7a loan, for example, is the most common loan for small businesses. For an SBA 7a, you will need a 680+ FICO score. You will need to request a credit report from all three major credit reporting agencies like Equifax, TransUnion, or Experian.

You will also need to develop your business plan. A thoroughly prepared business plan must include a complete set of projected financial statements, including profit and loss, cash flow, and a balance sheet. You will also need to submit personal and business income tax returns from the three previous years.

Some lenders also require business owners to submit legal documents depending on the nature of your business. Be prepared to submit business licenses and registrations, article of incorporation, copies of third party contracts, franchise agreements, and commercial leases.

Review Your Lending Options

For small business loans, there are a variety of lending institutions to peruse through for financing. Do some comparison shopping. Different lenders have different criteria points, interest rates, and financing.

You can choose to apply at a national commercial bank or smaller regional bank. Often small businesses have an easier time getting approved by smaller regional commercial banks. Credit unions are also an option, but you will need to be a member. If this is the case, speak with a loan officer at your local credit union about assessing your business for a small business loan.

There are also state and local economic development agencies that specialize in advancing entrepreneurialism. Non-profit organizations can provide lower interest rates than large banks, or are more willing to aid with small business owners who do not qualify for traditional commercial loans.

Prepare and Polish Your Business Plan

Once you have all the documentation, preparing your business plan will be more streamlined. A business plan is a living document that projects three to five years ahead—configuring how the business will grow revenues via your intended plan of action.

You will need to the following:

  • Projected financial statements
  • Profit and Loss statements
  • Cash flow
  • Balance sheet

From these documents develop your business plan. Use the following checklist to make sure you have included every provisional detail.

Executive Summary

This section describes your business. It should include a mission statement, founding, growth highlights, products and/or services, glimpse of financial information, and a summation of future plans for the next 5 years.

Start-ups and new businesses should treat an executive summary like a pitch. Show you have done the market research,  include your own experience, market gaps, and your vision.

Company Description

The company description expounds on the executive summary. It should include details on your business’s marketplace, an explanation of your products and/or services, analysis of consumers, and competitive advantages your business possesses.

Market Analysis

This segment segues from your company description. A market analysis provides more detail into your market knowledge. This is where you will present research findings applicable to your business.

Include:

  • Industry description
  • Target Market and Evaluation
  • Size of Market
  • Market Share Gains
  • Competitive Analysis
  • Regulatory Restrictions

Be thorough. To avoid penetrating questions during your presentation to lenders, answer them all here with a prepared course of action.

Organization & Management

What does your team look like? This section outlines your company’s organization structure, details of ownership, profiles your management team, and qualifications of a board of directors.

Service & Product Line

The emphasis in this description should be on the benefits of your potential consumers and retained customers. Focus on what your business provides that will target customers. Details about product’s life cycle, intellectual property, and all research and development should be included.

Marketing & Sales

How are you planning on driving sales and retaining customers? A comprehensive marketing strategy blueprints growth strategies, distribution, and communication to customers.

Funding Request

This includes your needs for your present request, and for the future. This section shows your intention with a loan and strategic plans for the future.

Whatever you plan on doing with your small business loan—list that here.

Financial Projections

With clear objectives, describe where you believe the financial state of your company will be going forward. Include data from the last five years. If you have not been in business this long, provide prospective financial data.

Visit Local SCORE & SBDC Offices for Guidance

Speaking with experienced executives and business experts will help ease and answer any unknowns you might have before presenting to a lending organization on your personal financing situation. Local Small Business Development Centers, or SBDCs, are part of the small business administration. Many local chapters are on nearby university campuses. You can also explore non-profit SCORE centers which offer free business mentoring from retired executives. If there are no local centers near you, information and advice are offered online.

Think of these aids as continued networking. Establishing a relationship with your local chapters opens the doors to enriching insights from small business owners who have the expertise for success.

Build Your presentation and Make Your Appointment

Once you have determined you are eligible, found a financially beneficial lending organization, and constructed your business plan, it is time to apply.

Take a proactive approach toward the application process. You will want to craft an articulate professional package with a succinct method of delivery. Data should be concise. Deliver summative information in the form of spreadsheets, charts, and graphs to quickly demonstrate your plans and knowledge to the loan officer.

From here you make an appointment and request enough time to present with visual aids. You can use large print-outs, PowerPoints, and props if necessary. If you have done your homework, this should be the easiest step. A presentation will only be as good as the preparation.

Good luck, and for more information small business loans, visit the SBA website.

 

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How Women are Dominating the Pet Business Sector

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Cracking the Glass Ceiling: Women in Business Continues to Rise with Growth in the Pet Industry

Amidst all the turmoil seen in headlines lately, there is good news. A force that was once marginalized, women in business are becoming a strong force. There are over 11.3 million women-owned businesses in the United States, making up 38% of all U.S. businesses, according to The 2016 State of Women-Owned Business Report. This is a 45% spike from 2007, compared with 9% increase in overall U.S. business. As the fiscal year draws to a close in 2017, many are anxiously waiting for reports of women in business statistics continuing to show growth. Women-owned businesses are vital to the country’s economy. They employ almost 9 million people and generate over $1.6 trillion in revenue every year. Just as importantly, women business leaders help spread equality in the workplace as we continue to chip away at the glass ceiling.

There is still a long way to go but the increase in women-owned business is a good sign. 61% of women in business can be found in one of four sectors—administration, professional technical services, health care, and the pet industry. Business growth in these individual sectors has widened the margins for women to own their own business. Another reason 3.5 million women-owned businesses have opened in the last decade is many women possess innate skills that make them strong business leaders. Women are often adept with priority setting, people coordinating, and communication.  Driven by tenacity and proficiency—more than half of the estimated 9.72 million new small business jobs and one-third of total anticipated new jobs will open from a women-owned business in 2018, according to the U.S. Bureau of Labor Statistics.

A company making huge ripples in the pet franchise industry, Splash and Dash Groomerie & Boutique have been able to open doors for many women looking to escape the inhibitions of corporate America. Women like Natalie Dufek who worked as a nurse before opening her own shop in Meridian, Idaho. “The last few years I was in nursing I got into the management side of things, so I didn’t have as much hands-on nursing with the patients. It was more like sitting in meetings and managing. I just kind of lost some of the passion. There was an organizational restructuring in the company I worked for, and everything just kinda changed for a while. So I was like I need to do something different.”

Natalie, among other women, found a new promising venture in the pet industry, an industry that is growing itself by over 62% since 2007, and ended with $66.75 total U.S. Spending.

Women-Owned Business in the Pet Industry

Based in Portland, Oregon, The Earth Friendly Pet Company Cycle Dog is owned by Lanette Fidrych. Her company stated in 2009 and has since recycled hundreds of thousands of used bike tubes. Cycle Dog’s business model takes old bike tubes—made from rubber that would otherwise sit in a landfill—and figured out a way to handcraft dog collars and leashes. The collars are antibacterial and her line has increased to harnesses, toys, and beds. Cycle Dog is a company within the pet industry that is pioneering the way for women-based businesses with strong values.

Another company founded by a woman that is partnered with Splash and Dash Groomerie & Boutique is Kelly K. Ison’s company, Einstein Pets. Einstein Pets’ treats are made with only seven ingredients including the superfood Chia Seed. The aim of the company is to provide pet owners with an all-natural responsible diet that is as delicious as it is healthy.

Splash and Dash love to give back and try to do our part in not only partnering with women in business but with women-led companies who are choosing to lead with corporate social responsibility. Companies that are using eco-friendly recycled materials to make pet supplies are strong partners. Dog food supplies that use all-natural holistic ingredients in their formulas are traits Splash and Dash values. Providing both Cycle Dog and Einstein Pet products in our shops is a point of pride.

Women in Franchising

In the franchising segment, women have also been able to gain more traction. With the ‘boy’s club’ networking schematic still ingrained in the corporate ladder, many women opted out of lower salaries and condescension—in favor of the freedom of franchising. 21% of all U.S. franchises are women-owned. An additional 43% are co-owned between men and women, making two-thirds of franchises controlled by a woman in some capacity.   

What makes franchising appealing for women, is that franchising gives them the ability to choose who they hire and work with. Franchising allows one to become their own boss. The benefits of this are that a franchise owner can control life-work balance, schedule, salary, location, and other important aspects of their career. For some women in business, owning a franchise gives them autonomy in the workplace they want.

Recent Survey published by the Franchise Business Review show that female franchisees are generally happy across the board. 90% of women stated they enjoyed operating this business while 74% stated they would “do it again.” Franchising, like all business, is a calculated risk. What separates owning a franchise from traditional career pathways, is that when you sit down for an interview with a franchisor, you are assessing their values as much as they are assessing your own. A reputable franchise has a business model that operates as two-way street—franchisee success is company success.

What Splash and Dash Has to Offer

Splash and Dash Groomerie & Boutique is a unique pet salon grooming and retail franchise. The company has proprietary software that simplifies every aspect of owning a pet store. Business operations like client booking, automated marketing, and employee management are all handled by the company’s terminal software. On top of this, an advantage Splash and Dash owners benefit from is having a recurring revenue source. The signature service is membership-based and is completely unique to Splash and Dash. This makes it a win-win for franchise owners and customers. Splash and Dash is the only franchise able to provide a recurring revenue stream with the signature service.

The company is also proud to have franchise owners from diverse professional and cultural backgrounds. Before opening their shops many of the women franchisees worked in industries unrelated to pet care. Franchise owners like Sandy Yueng who opened her Splash and Dash in Suwanee, Georgia.  “I always loved dogs,” Sandy says. “I was thinking since I have to pay someone to do this. Why don’t I  just do it?” Sandy’s inspiration to open a pet shop was caring for her three Shelties. “With the boutique, I can educate people on high-quality food, how they can help their dog’s health. I am happy to hear to when customers tell me their dog’s skin-health gets better after switching foods and getting [spa] services.”

Another woman who converted her grooming shop to a Splash and Dash Groomerie & Boutique is Jaime Meyer from Coppell, Texas. I was looking for a way to stay current in our technologically driven society,” Jaime says. “It was extremely hard as an independent to find that technology.” After opening her Splash and Dash, Jaime has found a new ease with owning her own small business. “The transition was fun, I really enjoyed all the additional technology that was afforded to us. I enjoyed being able to provide the friendly user experience. I thought it was nothing but positive,” she says.

From more ideas for women in business, click here.

 

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