M News: What's New With Us. What Matters To You.August 24, 2017 8:34 pm
Everyone loves your homemade BBQ sauce, and you’ve started to wonder if you could actually create a business out of it. You learn about your potential market, create a business plan, develop your brand, work out the costs, find a location, and then what? More than likely you’re going to need a small business loan.
There’s no better place than to look to your local community bank. Community banks like Merchants tend to focus on the needs of the businesses and families where the bank holds branches and offices. They are also typically locally owned and operated meaning they know you, your family and how your business idea will fit into the local economy. And, perhaps the main benefit is that lending decisions are made by people who understand the local needs of families, businesses and farmers.
Two years ago, when we launched our new website, we set out to develop tools that would help our local small business customers. How are we different? What sets us apart? We knew that our local lenders connected us to our communities in very powerful ways that big banks can’t touch. That’s why we created a section on our site called Lender Connect. Here you can meet our local lenders and easily connect with them via phone or email. You can also get to know these local lenders by reading their bios. You’ll quickly see that the majority of them not only live here, but were born and raised here.
We recently talked to Will Harding who joined Merchants in 2014 and works with local businesses and farmers on their lending needs. We ask him where you should start when you have a business idea you want to take to the next level. “It’s best to start by developing a business plan,” he said. “Research similar businesses, estimate income and expenses and consult an attorney for the cost of creating the business documents you will need and any fees that go along with them.” Will said in addition to your attorney, it’s smart to consult with an accountant to discuss what business type might work best for you such as LLC, partnership, corp or s-corp. He added that speaking to a loan officer about your needs and where you see your business going in the future is also an important first step.
According to Will, the best types of loans for small business start-ups depend on your needs and can range from short term capital and long term real estate loans to equipment loans and revolving lines of credit. With the right local lender as a part of your team, together you can assess your needs and decide what loan product best suits those needs. You will need business legal documents, your business plan as well as your personal financial information including a financial statement and tax returns.
If you can’t qualify for a bank loan, there are other options available to you. SBA loans can be a viable option and the Small Business Administration works with the bank and the customer to provide financing to customers that otherwise couldn’t get approved for a loan.
“We always try to be a ‘value added’ lender,” Will said. “Anyone can make loans, but we want to add value to the relationship between the bank and the customer by understanding their business and offering advice and additional ideas or approaches where we see opportunity.
Local banks work to build small business opportunities in their communities. “It’s the relationship between the loan officer and the customer that sets certain banks apart,” he said. “This always goes back to who is making the decisions, and where those decisions are being made.
“All of our loan decisions are made right here, there is no corporate office halfway across the country. We make loan decisions right here to people that live in our community. When someone calls our bank, whether it is the main number, someone’s direct desk number, or our cell phone, they always get a real person. Our loan officers want to understand our customer’s business and create a partnership between the bank and the customer.”
Merchants has developed real partnerships with local businesses and you can read about some of our local business success stories in the Way To Go section of our web site. Eight very different local small businesses with one thing in common. A bank with an uncommon commitment to our local small business customers. Read the stories and you’ll get the inside scoop on how we helped these remarkable business owners in Cullman, Hanceville, Fairview and Arab go from having a big dream to having a big following. Because community banks are themselves small businesses, they understand the needs of small business owners. Their core concern is lending to small businesses and farms and they make over half of all small business loans.
Get to know the local businesses near you. No matter what their product or service, their focus is delivering the best in customer service, just like their local bank does. From local restaurants and volunteer fire departments to a variety of retail establishments, we set out to build real relationships with our business customers.
Small business loans are available from a large number of traditional and alternative lenders. Small business loans can help your business grow, expand into new territories, enhance sales and marketing efforts, allow you to hire new people, and much more.
So, if you need to secure your first small business loan or to expand a current business, we invite you to start with your local community bank. Reach out to the lender nearest you, preferably via our Lender Connect portal. To give you even more information, we are sharing an article from a recent issue of Forbes, “10 Key Steps To Getting A Small Business Loan”. By anticipating what lenders will review and require, you will greatly increase your chances of obtaining a beneficial small business loan.