Qualifying for a small business loan takes passion and a plan for growth and sustainability.
Having pages of great words and financial summaries in your business plan is pretty useless if you know nothing about qualifying for a small business loan.
Sure, some of us develop business plans … well you guessed it … for planning purposes. But most of us do it in hopes of moving a loan officer or investor to open their wallets in support of our vision.
We’ve helped a significant number of small business owners develop fundable business plans and are committed to always giving the people what they want. So, this time, we set out to get the view from the other side of the table.
Emily Sullivan, Relationship Manager in the Cleveland, Ohio office of the Economic and Community Development Institute (ECDI) shed some light on what entrepreneurs need to know about the small business loan approval process. ECDI is a 501(c)3 non-profit economic development organization that offers financial literacy training, innovative microenterprise development training, capitalization programs and much more.
ECDI Offers Business Loans and Training
BAAB Writing: How many local startups/small businesses has ECDI helped since opening the Cleveland office in July 2012?
Emily Sullivan (ECDI): More than 40 small businesses have received loans from us, but we’ve also provided business training to individuals as well. We work with various training partners throughout the Cleveland area such as Bad Girl Ventures, the Hispanic Center, Explorer, Magnet, COSE and others. We meet with clients to assess their needs and bring in all necessary partner resources to help small businesses get to the point where they can be successful.
What To Do Before Applying for a Small Business Loan
BAAB Writing: What are some steps ECDI typically advises applicants to take prior to applying for a loan?
Emily Sullivan (ECDI): At ECDI, you’ll definitely need a business plan, projected financials broken down by month for the first year and then just three-year general projected financials for a startup. We do need all small businesses that are registered with the state to have an employer identification number (EIN) and a DUNS number. Those are just some of the things we look for to lay the groundwork. Once the basic requirements are met, we work with clients through the loan application and underwriting process.
Top Three Reasons Entrepreneurs Ask for Funding
BAAB Writing: Based on the applicants you’ve seen, what are the top three reasons businesses request funding (e.g. cover the cost of marketing campaigns, staff, etc.)?
Emily Sullivan (ECDI): Definitely a big one is marketing. A lot of people are trying to put up their websites, handle distributing and advertising, so definitely marketing. Another reason is increasing inventory which is typically a focus for retailers and restaurant owners. Lastly, funding is also requested to handle general business expenses such equipment and machinery.
Tune in Next Tuesday for Part 2
Wow, this is getting juicy! Tune in next Tuesday for Pt. 2 of our interview with Emily Sullivan of ECDI. She’ll spill the tea on what information should be included in your business plans and answer the age-old question: “How long should a business plan be?” Trust me … you’re going to want to hear this.
Can’t wait until Tuesday? Sign up for our VIP Club and get the rest of the interview today. For guidance on how to write a business plan, download our Short and Simple Business Plan Guide.