How Do You Finance Your Business

Financing is essential for starting a business, growing a business and continuing to prosper. Without lending and obtaining business credit, a new or existing business will struggle to reach their goals. In order for a lending institution to grant a loan or extend business credit, the business owner will have to prove their personal credit worthiness and show that they possess the needed skills and appropriate business plan that will lead to success. Business bankers will look for the following:

Personal Credit Information – Lending and obtaining business credit starts with the individual. The banker will look at the individual, their personal credit, and their management skills. Their personal credit will determine whether the banker will work with their business. Good management skills are necessary in order to thrive even in difficult times. If the economy turns, does the individual have the skills and financial resources to keep their business going?

Start-Up or Existing Business – Is the individual trying to start a new business or do they own an existing business with the potential to expand? If the business already exists, be sure to maintain all financial records. The banker will need to know if the business is making money. If not, the banker will need the individuals plan to make money in the future so they will be able to pay back the debt.

Business Plan – This is a very important component for the bankers decision of whether or not to work with a business. In order to create an appropriate business plan, the individual has to set goals and decide what they need to achieve them. The business plan should include: financial information on the prospective or current business owner (financial statement, several years of tax returns), completed business plan from beginning to end, detailed list of business costs (staff, rent, equipment, insurance, etc.), the businesses projections for the next 24 months (expenses, profit), necessary capital and working expenditures.

There are many resources to help you get started and give you insight on financing your business and putting together an appropriate business plan. Be sure to check out your local Small Business Development Center. The University of Scranton and Wilkes University both have centers that offer free appointments and information sessions. You can also find ore valuable information at www.SBA.gov.   Take advantage of all available resources to prepare for a successful future! For more information on business lending options  contact one of our Fidelity Bank Business Lending experts for assistance at 1-800-388-4380 or fidelity@fddbank.com.