Comstock's magazine 0219 - February 2019 - Page 77

SPECIAL PROMOTIONAL SECTION friends and credit cards,” says Fleming. “Not with us.” Leslie of the SBDC agrees. Whether the money comes from self-financing or equity on a balance sheet, “the banks are looking to see if you have skin in the game. If you are asking the bank to take a risk, they want to see that you are taking a risk, too.” For budding entrepreneurs whose wal- lets are a bit thin, Ciaran McMullan, CEO of Suncrest/Community Business Bank, sug- gests obtaining a loan from an online lender. “There are many around the country and some are better than others,” he says. “They are usually good for smaller loans between $5,000 and $250,000 and often are good for businesses, like startups, that can’t meet lending hurdles from banks.” LEVERAGE YOUR ASSETS McMullan notes that one of the most chal- lenging times for financing is during the transition from a startup to medium-sized business. “That’s when the visionary who started the company needs to become a manager. It’s critical to develop proper re- porting and accounting systems. As the business grows and you accumulate more capital, the bank expects more information.” As a company grows, the structure of its financing will depend on its needs. As a company gains assets, it can leverage them to meet its financial needs. A startup that wants to buy a building it has been leasing, for example, can use up to 75 percent of the building’s collateral for a long-term, fixed- rate loan. A line of credit for day to day op- erating expenses can be secured with a per- centage of inventory or accounts receivable. As much as 80 percent of the cost of new equipment can be used to secure a loan to buy it. n Bill Sessa is a Sacramento-based freelance writer. Contact him at Live Here. Bank Here. Grow Here. Strong communities are built on successful businesses. We’re here to support both by providing more of what your business needs to thrive. • Experienced local business bankers • A full range of business & personal banking products • Custom loans & local decisions • Sophisticated cash management tools • Competitive commercial & agricultural financing solutions • Commitment to building strong local economies (916) 830-3560 Member FDIC | EQUAL HOUSING LENDER © 2019 Suncrest Bank. All Rights Reserved. February 2019 | 77