South State Bank’s Carol Shirley gives you the tips on how to land that loan from the bank
Owning a salon is the dream of a lot of beauty professionals, but funding that dream can be a complicated process, especially if you don’t know what to expect when you walk into that office. TBC was lucky enough to talk with Carol Shirley, retail area manager for South State Bank, who has 25 years of experience in banking and finance on her résumé, including small business lending. She had some excellent advice for those looking to make their dream a reality by landing that business loan.
Cash Injection
So, what is cash injection? Simply put, it’s an inflow of cash into a company, and most banks will require 20 percent from you up front. “They want you to have some ‘skin in the game’ so to speak,” said Shirley, “and you should never expect the business to run itself within the first year.” This means that the bank will look to see if you have other sources of income aside from the business as well as at least six months of expenses figured in. And these can all be displayed in a well-prepared business plan.
Business Plan
This seems like a no-brainer, but there’s so much that goes into a thorough business plan that you need to be prepared to provide. Some things to think about and include in your plan are:
- market area
- location
- equipment
- inventory
- who are you hiring; and
- your personal credit and financial history
Another important point to consider is whether you’ll be acquiring an existing salon or opening your own. “If you’re buying a business, the bank will require at least two years of detailed financial history of that business and inventory reports,” said Shirley.
Approach a Bank You Already Have a Relationship With
Having an established relationship with your bank makes the whole process that much easier for a few reasons. You’ll know your bank’s expectations for their loaning process and you’ll be more comfortable asking questions—and yes, you should ask questions. “Find out what the bank requires for a SB loan,” said Shirley. “See if they use government lending programs like the Small Business Association.” Knowing these answers can make or break your receiving that loan.
Be Prepared
Preparedness is a given, but it can’t be overstated. The biggest downfall of small businesses is a lack of research, so do your homework. Dress for success. Prepare to be your own boss!
Image courtesy of WikiMedia Commons
