How To Get A Business Loan, Part. 2 – Interview with Brookline Bank

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Complete Video Transcript

0:05day
0:09hi this is ivan is now with many retail properties
0:11about leasing representative for many retail work a small businesses and
0:14independent retailers
0:15this is the second segment over SBA retailer education serious
0:19with george rickles from Brookline bank whenever tenants your
0:22Burlington marketplace today we’ll be discussing
0:26the how to attain small business loan %uh 3 sb I
0:30George could see again to see Evan stirs we learned about the SBA program and how
0:34banks work with SBA
0:36what’s a have a retail business idea and i’m looking to finance it
0:40no clue what you through the process and what I would do next actually I think
0:43once you have the
0:44business idea on the first thing to do is find a location
0:48if and when you’re shopping malls the next thing is to do is come up with a
0:53business plan you really want to identify yourself
0:56who you are are in a business plan what your opportunity trying to
0:59to establish and really what will help make that opportunity successful
1:03the third thing is want to make sure that you get some business assistance in
1:07the SBA provides a lot about
1:09technical assistance and business training one that I particularly like
1:14the score
1:14other retired group executives that they help business out potential business
1:19owners
1:19package up a plan and make sure that they have done their i’s and cross the
1:23t’s
1:24to make sure when ace meet with the business a banking
1:27professional at their able to submit a complete package
1:30and then last night we should be to leave the financing of that
1:34the term financing which is patty a business plan but then seeking the
1:37actual financing
1:38one other retailers the I work with
1:42arm really well I’m staying with the processes from
1:45you know so what’s involved in the application process them is there a lot
1:48of people work for them to do
1:50with the application process was a complete the business plan
1:53and have written all that and they’ve come to the bank to now apply far
1:57with what we said we would do is use our own applications
2:01I’m and we will underwrite our own underwriting methods
2:05we use the SBA with additional forms
2:08to help support the financial decision that we make
2:12for that client without power I’m the application process itself is
2:17I’m while it can appear to be somewhat overwhelming excitement when people hear
2:21SBA they think the government in
2:22how much red tape I need to go through a true and not
2:26that bad and and bankers will be able to walk through
2:30the Iraq clients the bar is for the process
2:33her crime are going the forms I know sometimes things can be overwhelming
2:38can you elaborate on some other forms that a small businesses retailers can
2:41expect
2:42the applications I we all start with our underwriting process we have the
2:45business banking credit application through the bank
2:47we have a personal financial statement and you submit your business plan
2:51along with that the SBA has some additional forms and typically we use
2:55for our experts be express program
2:57its call the SBA 1999 really just tells us a little bit about the bar
3:02and lets the SBA know who the bar is arm
3:06it’s five pages that SBA 1919 form
3:09but really the questions were the first three pages the
3:13second form that we have is the personal liquid assets statement
3:17the focus is just on a liquid assets and something at the SBA
3:20needs to be aware of above the bar in a las formas the IRS Form it’s a
3:2540 50 60 and what that is is just an authorization form to go to the IRS and
3:30Paul transcripts of their most recent
3:32tax returns that they provided to us we just verify
3:36regret to regard to the money up front
3:39I would you help with our and retailer
3:42or start-up would you help me to determine how much I would need that
3:46save for a down payment
3:48would you help me understand the the loan size are to be
3:51I approved for could apply for yeah I mean we certainly help file once you do
3:56your business plan
3:57I mean on the business plan is to come up with what is it that you need to
4:01to start your business you know what will your expenses be for the first two
4:05years we need some detailed information on that
4:07I the business plan itself I will identify
4:12what your expenses will be I’m if you
4:15week will do eighty percent financing such a project total project cost
4:20I is one hundred fifty thousand dollars a will do eighty percent about loan
4:24for you 20 percent that would be your own cash injection York equity into the
4:28into the project
4:29into your business a great arm
4:32then as far as the application process i kno we’re working with a lot
4:36of people who want to become a franchisee arm
4:39is a process different for a franchisee versus to somebody
4:42independent doing something wrong no process very simple special to start a
4:47business
4:47very somewhere the only additional information we would need for our from a
4:50franchise
4:51is a first for the franchise agreement because that is going to be calculate
4:54the expenses to their franchise will be calculated into
4:58the ability to repay the debt enough the funds that are available
5:02so in regards to working with the franchise are there any unique or
5:05special benefits
5:06for for someone to work with a friend franchise and become a franchisee
5:10well things that the SBA has what’s called an SBA approved franchise list so
5:15typically only franchises that have been in business for a number of years
5:18and have a proven success record they
5:21approved they’re on their approved West so we as under the underwriters wouldn’t
5:26typically what that mean more
5:28I’m favorable fashion because it is an approved type franchise from the SBA
5:33ultimately it still comes out to the underwriting process and and
5:36the bar itself so in regards to going to start up
5:40I was there anything unique about the application for a new startup purses an
5:45existing business looking to expand our opener
5:47a second or third location yeah there’s a couple different things there
5:50the a startup obviously it is brand new business are it’s based on
5:54decisions underwriting decisions and lending decisions are based upon
5:58projections what is the business what is the business on I think they’re gonna be
6:01able to achieve for
6:03for revenues and net income the the
6:06existing business there’s some track record there they have a proven track
6:10record in their business
6:11and we can use some other financial information that they have to help
6:14assist the discerning along
6:16now there are some businesses that like to open up a second a third location
6:20separate from their existing business if that’s the case
6:24then we look at that again as a pure start up even though they have the
6:27experience
6:28for example with a little luck fast-food shop but they weren’t open up a second
6:32location but keep it independent love their
6:34the current location are scan BSBA and then I would be with the additional
6:38paperwork in
6:39and underwriting business plan things like that for it
6:42so and when they’re going through this process and working with you and the
6:46bank
6:47where some common mistakes people do make I’m
6:50that they you know up are potential retailer should be aware
6:54yeah I think some the common mistakes that people make our
6:57buzz when you’re putting together their business plan they need to make sure
7:00they include
7:02a a detailed information about the the market after going into
7:06you know really what will separate them from any other competition
7:10arm understand the competition include a resume what is it about themselves that
7:14will make them successful at what they do
7:16that’s all part that business plan and that’s part of an organization like
7:20score
7:21the retired group of executives that will help provide that information to
7:24them
7:25I’m the state the next thing I was like the check the people as
7:28check your credit score that’s important because typically with any underwriting
7:32process
7:33it begins with credit score and you want to make sure the if you
7:36if you think that you have a great credit score and in you
7:39want to make sure there are no surprises on that arms are really we advise people
7:43to
7:44take a look as that’s why the questions I asked we find any surprises on credit
7:49um you want to make sure that your financials are up today because we do
7:53go ahead and verify tax returns
7:56other financial you provide to us your personal financial statement
8:00as is up to date personal financial statement is really
8:04I call it a personal balance sheet it’s your assets that you have
8:09your liabilities and then you equity your asset so what you own
8:13the liabilities away 0 in your equity is your net worth
8:17so that’s something that we want to make sure that that there’s a positive net
8:21worth at the end the battle
8:22are so what a retailer’s I work with are very eager to open their business
8:25arm why the questions they ask me is how long the process is gonna take so when
8:30some comes to you and start the application process how one could expect
8:34for them to get through that not a long it once they come to us and and and its
8:38start-up business so we will try to identify all the forms ahead a time
8:42and submit that with the application and with the business plan
8:45and never than that provided to us typical underwriting decision can be
8:49anywhere from five to seven business days and that’s to because we
8:53to but we will underwrite to our own standards
8:56and then utilize the SBA any additional forms that we have
9:00as a guarantee once we approve alone
9:04and we submitted to the SBA for a guarantee number
9:07its use within 24 hours they provide that to us because they’re relying on
9:11our underwriting process and as an express a lender
9:15for the SBA we don’t have to send the paperwork to them
9:19beacon on the right and make the decision ourselves in a support the
9:22decision that we made
9:23what’s the best way to contact your bank for example
9:26if we have a retailer that interested in a plan for long I think the best way
9:30would be to go to Weber prime bank dot com
9:32I and click on a business section we have a list or bankers
9:36a business bankers at a rugby field that
9:39myself and three other bankers and so we want to be able to find the bank that’s
9:43closest to them
9:44they can spend the time and speak with them Tigran the suffering a long process
9:48you know anybody doing a startup as other knees and services that they may
9:52require
9:53from finance them point where the services does Brookline bank provide to
9:57retailers saw
9:57once once a retailer does get established they’ve got their lone to
10:01to start a business or other existing business opening a location
10:05we do provide night drop services at our branches we do provide
10:09are credit card processing payroll processing
10:12we have a wide array of cash management products that really would fit most
10:15business needs
10:17I’m to the appropriate business a great
10:20George thanks again for your time today was a pleasure speaking with you thank
10:23you
10:23was rushing to win 7 thank you so this concludes our second segment me
10:28SBA retailer Education Series stay tuned for third segment we’ll be talking about
10:32the approval process
10:33and most important the decision on the line

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