Did You Know?

Small business owners often need access to capital to grow and sustain their business.

When this becomes a short term and/or long-term reality, the small business owner must first prepare for a meeting with their intended lender.

During this preparation, financial performance documentation must be prepared so that it can be presented.  As a small business owner, you do not want to go in empty handed!  Additionally, talking points should be prepared to guide the conversation to show your business’ strength. Indeed, showing your business’ strengths is a great way to get the lender extremely interested in working with you.

​​​​At the scheduled meeting, you will get acquainted with the lender, the organization, and the types of projects that the lender finances. Discuss your company’s specific financing needs so that the lender can determine the appropriate types of financing to offer you.  This meeting should include sharing all uses and sources of the identified funding amount as well as the financing terms and conditions. Remember to ask any questions you may have.

The lender will quickly determine, from the financial documents you presented, the overall condition of your operations from total revenue, cost of goods sold, total expenses, and ultimately your net income presently and historically for the past 2-3 years.  Ultimately, the decision to lend is about your cash flow and ability to service a new debt. Typically, this is referred to as your debt service ratio.

By sharing everything about you and your business, you avoid any surprises that could potentially derail the access to capital process!  This includes credit issues, tax issues, and legal issues.  The lender wants to know about recent successes and challenges with day-to-day operations and how the requested financing will benefit the company’s profitability.

At the conclusion of the initial interview, the lender will invite you to submit a formal request for financing or refer you to resources like FSC First’s Level Up program that provide technical assistance that supports small business owners in becoming better qualified applicants.

Contact VP of Business Development, Steward Smith at jsmith@fscfirst.com, should you need assistance with preparing for acquiring access to capital.

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