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Utah Business

A common sense approach to expand your business.

No matter how big (or small) your business is, our partners at Hillcrest Bank discuss which business financing options are best for you.

Financing options for your business

No matter how big (or small) your business is, our partners at Hillcrest Bank discuss which business financing options are best for you.

So, you want to expand your business?

After years of long, hard work developing demand, you’ve grown and are at a crossroads of opportunity. Do you continue on your current track or invest in yourself and that new opportunity to change the trajectory of your business? With small business financing, you can take advantage of that new opportunity. 

These situations are not unique to any one business. But, is there a common sense approach to knowing if a bank is a right fit for your needs? If yes, what options for financing exist to help your business expand or grow? 

Banks are generally the right fit for business financing if:

  • The business has been in operation for 2+ years
  • The business is profitable and can support the payments on the needed debt
  • The owners have experience in the industry and a good credit history
  • The business has collateral to support the loan

The five C’s

In banking, that list is known in short form as something called the “Five C’s of Credit:”

  • Conditions
  • Cash Flow
  • Capital
  • Creditworthiness
  • Character & Collateral

It’s ideal if all five conditions are met, but is not always necessary. If your business has a weakness in one or two of the Five C’s, a bank may still be able to assist you by using an enhancement, such as a Small Business Administration (SBA) Guaranteed Loan to support your business. 

How do SBA programs help fund small businesses?

SBA programs allow the bank to offset risks while ensuring we don’t do something too risky. Let’s look at some examples:

  • Perhaps your business needs new equipment for an expansion opportunity. A bank’s conventional loan term of 5 years may make the payments too high to be feasible. However, an SBA loan with a 10-year term could make the payments more affordable. 
  • You’re an experienced manager for a business you love, and you are given the opportunity to purchase the business. With little collateral, we can use an SBA loan toward the purchase, lending much more than the collateral value.
  • You are dreaming of starting a business. You have a long track record of successful management in that industry, you have a strong down payment, you have solid collateral, and you have outside income that further reduces risk. However, you have no evidence of history of profits and cash flow. This is another instance an SBA loan could assist in financing.

At Hillcrest Bank, we work to get to know you, understand your goals, and find solutions to help you achieve them. Our mission each day is to find common-sense solutions to assist your business. Relationships start by getting to know one another. We will get to know you and your business, and once we understand your dreams and goals, we will help you find solutions. These may include a conventional bank loan, an SBA loan, a home equity loan, or an introduction to a community partner. Our job is to learn, understand, and assist to achieve. We call that banking “Where Common Sense Lives.”

David is the Utah President for Corporate and Middle Market banking for Hillcrest Bank. He and his team work with all industry types and help advise them on working capital solutions, senior debt structures, participations and growth capital strategies. To contact David, call 385.300.7216 or send an email to [email protected]

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