How to Secure Approval for a Business Loan

Introduction

• Speaker with head cold; reminder about pauses for sips.
• Importance of understanding how to secure a business loan, especially for government projects.
• Financing is a critical step in any construction endeavor.
• Complexities involved in government contracts.

About Columbia Credit Union

• Speaker: Chief Lending and Chief Credit Officer at Columbia Credit Union.
• Columbia Credit Union: Over 70 years serving the community.
• Services both consumers and businesses.
• 14 branches in Clark County and Portland.
• Team of 13 business lenders with over 20 years of experience.
• Helped hundreds of small businesses borrow over $300 million in the last three years.

Core Values

• People: Members and staff.
• Community: Belief in a vibrant community for long-term happiness.
• Financial Wellness: Commitment to providing resources for financial health.

Why Choose a Credit Union?

• Not-for-profit organizations: Lower fees and interest rates.
• Personalized approach to banking.
• Community-focused: Better understanding of local business needs.
• Member-owned: Accountable to members, not shareholders.

Preparing to Apply for a Business Loan

Understanding Your Project

• Clear understanding of the project scope, timeline, and budget.
• Familiarize with specific requirements and regulations of government projects.

Detailed Business Plan

• Comprehensive project description.
• Experience in the field.
• Realistic financial projections (pessimistic vs. optimistic).
• Payment timings and cash flow considerations.
• Highlight track record of successful projects.

Gathering Necessary Documentation

• Financial statements, tax returns, project contracts, etc.
• Importance of timely submission for streamlined process.

Establishing a Strong Credit Profile

• Ensure personal and business credit history are accurate.
• Resolve any credit issues before applying.
• Communicate with your lender about any known credit anomalies.

Government Loan Programs

• SBA and USDA programs: Favorable terms and lower interest rates.
• Delegated SBA lending authority can expedite approval.

Demonstrating Financial Stability

• Evidence of steady cash flow and a healthy balance sheet.
• Ability to manage debt responsibly.

Services Offered to Businesses

• Lines of credit, equipment purchasing, real estate loans, construction loans, and more.
• SBA-backed loans and other additional support services.

Required Documentation

• Three years of business Federal Tax Returns.
• Other financial documents as required, even if less than three years.
• Understanding the business context post-pandemic.

Key Takeaways

• Careful planning, thorough preparation, and a proactive approach are essential.
• Demonstrating readiness and capability improves chances of obtaining financing.
• Importance of having a strong communication line with your lender.

Presenter Information

• Mark Tim, Chief Lending and Credit Officer
• Joe Storm, Director of Commercial Services

Following Presentations: George Martin from Banner Bank

About Banner Bank

• Commercial Bank established in 1890.
• Presence in four Pacific Northwest states.
• Variety of business products including revolving lines of credit, term loans, and real estate loans.
• SBA and USDA guaranteed loan programs.
• Treasury Management Services and merchant services.

Requirements for Loan Approval by Banner Bank

• Five C’s of Credit: Capacity, Capital, Collateral, Character, Conditions.
• Capacity: Ability to repay loan via short-term assets and cash flow.
• Capital: Sufficient equity in the business.
• Collateral: Adequate collateral for loans.
• Character: Owner’s reliability during tough times.
• Conditions: Flexibility of the business to adapt to market changes.

Special Considerations for Public Works Projects

• Position in the contracting chain (general contractor, subcontractor).
• Understanding bid requirements and legalities.
• Ensuring compliance with certified payroll and progress billings.
• Accurate financial reports and having a strong support team.

Presenter Information

• George Martin at Banner Bank

Following Presentations: Stephen Fan from Craft 3

About Craft 3

• Community Development Financial Institution (CDFI).
• Provides loans when traditional lenders cannot due to various reasons (poor credit, limited collateral, etc.).
• Nonprofit organization with a focus on supporting communities and small businesses.

Key Offerings

• Loans for those with ITINs, poor credit, or limited collateral.
• Bridge financing for nonprofits.
• Support in Spanish including educational content and interpretation.

Types of Funding

• Difference between self-funding, grant funding, equity financing, and debt financing.
• Core focus on debt financing with a mission-driven approach.
• Offer long-term relationship building and additional support services.

Guidelines for Borrowing

• Avoiding predatory lenders.
• Importance of reputable lenders who evaluate financials.
• Transparent costing in loan agreements.

Reflecting on the Journey

• Evaluate your position and next steps.
• Importance of having a supportive and knowledgeable advisory team.
• Plans for long-term support and connecting with trusted resources.

Final Notes

• Craft 3's role in the community.
• Encouragement to build relationships with banks, credit unions, and alternative lenders.