The maximum loan amount is $350,000, and the maximum SBA guaranty is 50%। This is sufficient for many start up ventures.
Lenders and borrowers can negotiate the interest rate with a local bank. Rates are tied to the prime rate (as published in the Wall Street Journal) and may be fixed or variable, but they may not exceed the SBA maximums. Lenders may charge up to 6.5 percent over prime rate for loans of $50,000 or less and up to 4.5 percent over the prime rate for loans over $50,000. Lender uses mostly its own forms and procedures. The credit decision is made by the Lender, and the turnaround time is 36 Hours or less.
The Lender is not required to take collateral for loans up to $25,000. The Lender may use its existing collateral policy for loans over $25,000 up to $150,000. For Loans greater than $150,000, the Lender must follow SBA's general collateral policy.
We always offer a free consult to business owners and entrepreneurs on this option and others to expand and start up worthy ventures.
Wednesday, August 20, 2008
Friday, July 18, 2008
Your Business and a Green & Sustainable Econony
After a couple generations of wasteful policies in many areas highlighted by an energy policy that increased oil imports nearly threefold in that time, collectively, our citizens, and hopefully the politicians, have realized that sustainability of our society and lifestyle are intertwined in eco-friendly, energy and collective economic policies. Then there is a questionable war fought by admirable young men and women that have barely read of a place called Vietnam in their only a couple years removed history books, a current war primarily financed by borrowing from foreign governments. Gas prices offer no relief, food and commodities inflation is run amuck, and the mortgage and real estate market crises have terrible effects to many millions of our citizens.
Within this framework, you likely ask yourself if this is a good time to expand or start my business? The answer is a resounding YES, depending...on the business, the location, your experience and abilities. Same answer like during a great economy you say, and yes in general, but in these times the type of business is more critical, like green and sustainable ventures, the unwavering thirst for new tech and its applications or a Web-based business, let alone a business focused on addressing basic human needs beginning with food, shelter or health care. Being self-employed presents risks but not more than being employed in an economy seeking stability, but potentially greater rewards to maintain or seek that proverbial American dream.
Within this framework, you likely ask yourself if this is a good time to expand or start my business? The answer is a resounding YES, depending...on the business, the location, your experience and abilities. Same answer like during a great economy you say, and yes in general, but in these times the type of business is more critical, like green and sustainable ventures, the unwavering thirst for new tech and its applications or a Web-based business, let alone a business focused on addressing basic human needs beginning with food, shelter or health care. Being self-employed presents risks but not more than being employed in an economy seeking stability, but potentially greater rewards to maintain or seek that proverbial American dream.
Saturday, July 5, 2008
Financial Independence Day
We must celebrate and be thankful on an ongoing basis for the opportunities we have in the US, and in democracies and in a capitalist societies worldwide that presents financial opportunities for those that work hard, have great ideas and persevere.
The opportunity for financial independence is greatly magnified for those that are in their own business, providing they respect the delicate balance of their own ideas and efforts with the need for important team members such as consultants or key employees in business development like business plans professionals, marketing, operations, financial advisory and counsel. Our team approach helps us address these areas with your other team members so you can achieve the type of independence available despite a soft economy.
The opportunity for financial independence is greatly magnified for those that are in their own business, providing they respect the delicate balance of their own ideas and efforts with the need for important team members such as consultants or key employees in business development like business plans professionals, marketing, operations, financial advisory and counsel. Our team approach helps us address these areas with your other team members so you can achieve the type of independence available despite a soft economy.
Monday, June 23, 2008
Business Plan Flexibility
Unlike so many so called business plan experts and Web sites that put business plan writing and development into a neat little box or template, my team understands the need for flexibility in preparing business plans, both in length and the type of detail needed based on a myriad of factors. There are always exceptions to the rule, like a couple of business plans with a celebrity principal with deep pockets that received seven-figure equity commitments from a PowerPoint presentation; but flexibility aside, nearly all companies seeking capital need a concise Executive Summary, a detailed Business Plan to support the Executive Summary, including Financial Forecasts, Financial Analysis, Marketing Plans, Competitive Analysis, Market Share and Penetration, and other key components.
Since investors usually prefer to see an Executive Summary first, and less is often more in a Business Plan until serious interest is evoked, another aspect of flexibility comes into play for many companies such as developing the business plan in phases to save time and money as investors’ interest is gauged and secured। So many factors come into play, so do not fall into the traps of a template or writer's “cookie-cutter” business plan, missing key information, providing too little content in key areas or excess unneeded details in areas that are not important to your business focus.
Yes, flexibility is important, so that you avoid mistakes like completing your plan in a virtual vacuum or hiring a low-cost writer that does not understand the investment community, and make the right decision by hiring a professional expert team that may cost a bit more.
Since investors usually prefer to see an Executive Summary first, and less is often more in a Business Plan until serious interest is evoked, another aspect of flexibility comes into play for many companies such as developing the business plan in phases to save time and money as investors’ interest is gauged and secured। So many factors come into play, so do not fall into the traps of a template or writer's “cookie-cutter” business plan, missing key information, providing too little content in key areas or excess unneeded details in areas that are not important to your business focus.
Yes, flexibility is important, so that you avoid mistakes like completing your plan in a virtual vacuum or hiring a low-cost writer that does not understand the investment community, and make the right decision by hiring a professional expert team that may cost a bit more.
Sunday, June 15, 2008
Financial Forecasting
A careful analysis of the cash flow needs of your business on a month-to-month basis for one or two years is vital to an investor's consideration of the prospects of your business. A potential lender or investor wants to confirm that your business has a high probability of success so that their loan will be repaid or that their equity position has an upside...and that operating capital is sufficient and well spent. We often see financial forecasts done solely on an annual basis; however, that format does not adequately show the working capital required to ensure the short-term or long-term viability of your business. Furthermore, the assumptions utilized to create the financial forecasts must be turned into thorough notes that correspond to the income and expense line items shown in the income statements and cash flow analyses. Market studies are almost always necessary in order to make the correct revenue assumptions.
A Business Plan without comprehensive and summary forecasts supported by market analysis is almost certainly a plan that will not succeed in raising capital.
A Business Plan without comprehensive and summary forecasts supported by market analysis is almost certainly a plan that will not succeed in raising capital.
Thursday, June 5, 2008
Full Disclosure is Always the Best Approach
When writing your Business Plan, or any component thereof, it is always best to look at your business as though you were an accountant or attorney hired by the potential investor or lender. “No surprises” should be your motto. You must anticipate every reasonable inquiry and ensure that your Business Plan addresses all possible issues. All claims made in the Business Plan should be substantiated through research and documented in the Plan, Financial Forecasts and/or Appendixes. The easier you make the due diligence process for the potential investor or lender and its advisors, the quicker you will be notified of their decision, with the likelihood of a positive conclusion magnified.
Tuesday, June 3, 2008
Business Plan Costs Vary!
So many people respond to out our advertisements and ask "How much does a business plan cost," not realizing the variables that could result in a thesis for an MBA on the topic!
Obviously, the type of business in the primary factor in costs, as well as purpose such as if the business plan is an internal document or for raising capital and how much. Companies with history and a great financial statement or assets need less detail that a startup when a capital raise is the goal. Assuming a market study is needed, the requisite scope may be local, regional or national for the competitive analysis and the market share and penetration analysis. If your business concept involves new, unproven technology, we may need to conduct more intensive research to properly write certain sections of the Business Plan. If you have drafts of the Business Plan and/or Financial Forecasts, including a cash flow analysis available; the quality and completeness of the draft documents will greatly affect our fee. If we are completing documents from scratch, the fee would be more than if we co-authoring with our client.
We have completed Business Plans ranging from five pages to over 80 pages, plus appendixes, and these Plans have been used to obtain funding commitments ranging from $60,000 to $75,000,000. Hence, our fees for Business Plans have been as low as $650 and as high as $75,000. That said, 80% or more of the Business Plans we complete cost between $1,250 and $5,000.
Obviously, the type of business in the primary factor in costs, as well as purpose such as if the business plan is an internal document or for raising capital and how much. Companies with history and a great financial statement or assets need less detail that a startup when a capital raise is the goal. Assuming a market study is needed, the requisite scope may be local, regional or national for the competitive analysis and the market share and penetration analysis. If your business concept involves new, unproven technology, we may need to conduct more intensive research to properly write certain sections of the Business Plan. If you have drafts of the Business Plan and/or Financial Forecasts, including a cash flow analysis available; the quality and completeness of the draft documents will greatly affect our fee. If we are completing documents from scratch, the fee would be more than if we co-authoring with our client.
We have completed Business Plans ranging from five pages to over 80 pages, plus appendixes, and these Plans have been used to obtain funding commitments ranging from $60,000 to $75,000,000. Hence, our fees for Business Plans have been as low as $650 and as high as $75,000. That said, 80% or more of the Business Plans we complete cost between $1,250 and $5,000.
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