Last week’s Experience Talks seminar, “Banking Benefits Beyond Loans,” featured a lively discussion among several Cohutta Bank representatives and a few local entrepreneurs. The panel offered “been there, done that” advice for entrepreneurs who are in the market for capital and may be considering a loan.
Moral of the story? Your banker is your friend – but that friendship is a two-way street.
Talley Clower, Senior VP, Cohutta Bank: “Let us help you on the front end.”
Coming in with your pants on fire is the worst time to get a loan. Don’t have your first conversation with the bank when you absolutely need money, now. Instead, start early – and reap benefits along the way. You’ll not only build trust and a rapport, but you’ll give the bank an opportunity to tweak your business plan on the front end. That way, when you actually need credit, you won’t be starting from scratch.
Bankers also are well connected within the community. They’re constantly dealing with business professionals that offer services you need – from accountants to attorneys – so keep them in mind as a networking resource.
Pryor Bacon, Entrepreneur and Community Developer: “Have a business plan.”
If you’re asking for money, the bank is going to answer your question with a question: How will you pay it back? A solid business plan is an absolute necessity. That’s just half the battle – you also need to be able to present it and sell it. Know your company backwards and forwards, and be prepared to answer the hard questions – because the bank will be asking them.
John Sweet, Co-owner, Niedlov’s Breadworks: “Going to the bank and asking for money was a reality check.”
Working with a bank quickly put Sweet’s financials into perspective: The money that he thought would cover his launch actually only covered a single oven.
Identifying pitfalls has the tendency to take the wind out of an entrepreneur’s sales. Don’t let that happen to you. Straight talk will save you greater heartache – and money – in the long run. Use feedback and criticism to strengthen your plan and increase your odds for success.
Craig Miller, VP, Cohutta Bank: “We don’t have a red cross on our door – but loans are being made.”
The money that banks lend out is the same money that trusting customers deposit – so risk mitigation is a necessity. What’s more, banks aren’t charities. They’re a business, and they need to turn a profit. Thus, they’re not inclined to lend money to a business that is losing money.
But there’s a general perception that banks aren’t lending at all, and that’s not true. Loans are being made – to people who have the ability to repay them. Building a strong business plan, a good credit history and a trusting relationship with your banker can start you down the right path.
Join us Nov. 7 at the Camp House for Part 7 of the series, “Power of the Pivot and Regional Support Resources“