Are you a small-business owner who’s not getting the love you need from lenders? Are suppliers insisting on terms you find downright unfriendly?
The common denominator may be a poor business credit score. Here are some steps you can take to fix it.
What goes into your business credit score?
Just like a personal credit score, a business credit score measures the level of risk you pose for a lender. Unlike personal credit scores, most of which adhere to the FICO model, business credit scores don’t follow an industry standard.
The three major bureaus — Dun & Bradstreet, Equifax and Experian — use different methods to compile and monitor business credit (more…)
One of the most important decisions you’ll make when starting a business is choosing the right bank accounts. As an entrepreneur, you’ll want to make sure you don’t mix your personal finances with your business money: If your cash isn’t kept separate, it could be hard to meet IRS record keeping requirements, and that could lead to tax penalties. Opening new accounts in your company’s name is typically a better practice.
Having separate bank accounts could also help limit your personal liability. Say someone were to sue your company; your business assets might be at risk, but your personal assets would likely be protected from legal action.
Here’s a look at three common types of accounts to consider for your company. (more…)
The number of women-owned businesses has risen dramatically in recent years, a healthy sign for those who value greater diversity in the nation’s economy.
Between 2002 and 2012, the number of women-owned firms increased at a rate 2½ times the national average (52% vs. 20%) and employment at women-owned firms grew at a rate 4½ times that of all firms (18% vs. 4%). In 2015, for the first time, the government met its goal of awarding 5% of federal contracts to women-owned small businesses.
But such gains must be put in perspective. For example:
Women-owned firms make up about one-third of all businesses in the U.S., but they receive less than 5% of all available loan dollars, according to a 2014 report by members of the Senate Committee on Small Business and Entrepreneurship.
Women-owned businesses are smaller than average, employing only 7% of the private-sector workforce. More than 9 out of 10 women-owned firms have no employees other than the owner.
The Small Business Administration is a great resource for those who are starting or growing a small business. SBA loans offer an alternative to traditional lending, which can be difficult for small businesses. As an SBA-preferred lender, Howard Bank’s expertise can make the process much more streamlined. Here are some things you might not know about an SBA loan.
If you have a small business, and you need a loan, or maybe you have had some trouble getting a conventional loan, an SBA-backed loan may be the best choice. Small Business Administration loans offer affordable financing options, with small businesses more easily meeting the lending qualifications than for traditional loans.
SBA loan is a bit of a misnomer. The SBA doesn’t actually lend money directly to businesses. A bank makes the loan, and then in turn works with the SBA to get a guarantee between 50% and 90% of the loan. If the bank has experience with SBA and they are a Preferred Lender it is even easier to work with the SBA. So, choosing the right lender is important.
With SBA-preferred lender status and SBA Champion, Rosa Scharf, Howard Bank is a good choice as a lending partner. “The delegated authority from the SBA (that’s what the SBA-preferred status signifies) means that we have a 99.9% chance of getting the loan through the SBA process and approved. Howard’s size and position [in the region] means that we are much more nimble and flexible than larger SBA lenders, and usually the first one at the table.”
This competitive edge also provides the business more focused and local attention and knowledge. “You need a partner, and you’re getting the same level of expertise as the other banks, but I just have to walk down the hall to talk to the credit decision makers,” notes Ms. Scharf. There is no call to Raleigh or Buffalo. There is no need to sell the market to the person making the loan decision. He or she is local and understands the value of the local market.
Howard Bank offers the same level of service for a half a million-dollar company as for a ten-million-dollar company. The products change and needs change a little, but in general you need the same advice.
“I can’t change the rules. They are what they are. But I can make it a little less painful.”
The Howard Advantage
Howard Bank’s experience means we understand the SBA and how it works, and what can get done. We are the perfect partner to shepherd you through the process.
“That’s where my 20 years of doing it comes into play,” says Rosa. “And that’s what I tell prospects. I can’t change the rules. They are what they are. But I can make it a little less painful. Because of my experience, early on when I’m talking to someone, I can say, ‘These are going to be our hurdles from an eligibility standpoint.’ So, you don’t have to go through a loan process for three months, and then say, ‘Oh, we can’t do it.’ I can tell you up front what qualifies and what doesn’t qualify.”
SBA-backed loans provide affordable financing options for small businesses that may have difficulty obtaining financing via traditional channels. Howard Bank is a preferred lender for loans that are guaranteed by the Small Business Administration.
Here are seven things you probably don’t know about SBA loans:
The SBA doesn’t actually lend directly to businesses.
The bank makes the loan, and then works with the SBA to get them to guarantee between 50% and 90% of the loan.
Personal credit is important in the SBA loan process.
Especially with true startups, there is usually no credit history for the business and little collateral, so the credit history of the business owner(s) is significant. The owners’ credit history is an indication of how they handle credit.
The SBA won’t deny a loan because of collateral (lack of), but all collateral must be taken into account
The SBA requires the bank to consider all available collateral for the loan request. This could include the business owner’s equity in their home, vacation home, etc.
Quality is more important than quantity when you are deciding whether to apply.
Business Plans should be concise and cover the important details. The What, Why, Who, How and When of your business.
Banks are interested in small business loans.
Banks in general, and Howard Bank specifically, are very interested in helping small businesses grow and become really good bank customers. The SBA is a great tool that helps Howard Bank add value to the businesses in the communities we serve.
The SBA process doesn’t take as long as most people think.
Especially with an experienced SBA-preferred lender like Howard Bank, it is easy to navigate this process smoothly and avoid any potential obstacles. The experience Howard adds cannot change the SBA rules, but it does make it a lot less painful!
Borrowers must be a small for profit business in order to be eligible for an SBA loan.
A business must meet size standards to qualify for an SBA loan. Generally this means $7.5 million or less in revenue and 500 employees or less (depending on the industry).
With more than 20 years of SBA-backed lending experience, Rosa Scharf is the SBA Champion at Howard Bank, who works to provide SBA loan solutions to small businesses in various industries.
“I’m a Banker, in the traditional sense of the job,” states Vice President and Treasury Sales Officer, Michelle Coates. “I sell solutions – not products – and would never sell a client something that they don’t need. I believe in integrity.”
When Michelle Coates joined the Howard Bank team 5 months ago, she brought more than 35 years of banking experience with her. She started her career as a drive-in teller and then worked her way up through branch management, credit, credit administration, sales management and on to Treasury Management.
Treasury Management opportunities like the one that Michelle fills for Howard Bank are difficult to find. So she was happy to accept the position and the chance to establish Howard Bank as a bank of choice. “I want to be the clients’ Trusted Advisor, someone that they call because they want my opinion or advice.”
Many clients are also curious about the services that are used by similar companies. Michelle recognizes that, while some clients within each industry may use similar services, each client is wholly unique. “When we pro-actively engage our clients in conversations and listen to their needs, we can offer solutions that add value to their business. We offer a Relationship Team approach to better serve our clients.” A general approach to all clients in a specific industry does not address each individual business’s needs.
“I believe we should work to own each interaction with a client, internal or external, as if this was our business. The bottom line: It is.”
When asked specifically why customers come to Howard Bank, Michelle says, “The Howard Bank choice is the difference of having an account at Howard Bank and having a relationship. It’s being able to pick up the phone and speak to a person that is empowered to make a decision or own the issue until a decision is made. It’s about seeing your ‘Banker’ in your community, out and about, living and active. We are different.”
In the community, you might find Michelle at an Anne Arundel County Public Library, where she serves as a Director of the library’s Foundation. She also teaches financial education to Women in Recovery and believes that a woman with a strong financial education and an education in general is better prepared to lift up herself and her community.
Join Us for Midnight Madness in Ellicott City on Friday December 2, 2016. We will be raffling off the “Ellicott City Main Street Tree”. The tree is decorated with many unique decorations from shop owners and community members. Raffle Tickets are $5.00 for 1 or $20.00 for 5. Tickets will be sold outside of the Caplans on Main Street where the tree is on display on Friday. You can also purchase tickets at Howard Bank’s Rt 40/Centennial Lane or contact April Marasco at amarasco@howardbank.com
All proceeds will go to The Ellicott City Partnership. Good Luck! (more…)
Main Street Ellicott City is getting all decked out for the holidays. There’s an excitement and vibrancy on Main Street that marks the amazing recovery and rebuilding efforts and an incredible sense of community. The bonds formed up and down the street with people joining together to rebuild old Ellicott City have been key to these efforts. “Everyone just took a piece of the pie, and got to work,” says Maureen E.C. Smith of the Ellicott City Partnership
Merchants agreed that this event presented an opportunity to rebuild Ellicott City better than it was before. Restauranteurs who had never met were holding meetings talking about restaurant business in Ellicott City. Merchants from different ends of the street who didn’t know each other before the flood have been working together post flood.
The team spirit and level of effort has been incredible. “We’re not stepping on each other’s toes. And it’s amazing how well things have been happening. And it happened organically. We’re not duplicating effort and we’re not stepping on each other’s toes,” notes Smith. She also points out how many partnerships and organizations have been working together to get things accomplished, including Howard County. Ms. Smith is quick to note what an outstanding job the county and the county executive have done.
After a disaster of this magnitude, “normally only 25% of people return. We’re expecting 75 – 80 % return. We are so (more…)
When Michelle Coates joined the Howard Bank team 5 months ago, she brought more than 35 years of banking experience with her. She started her career as a drive-in teller and then worked her way up through branch management, credit, credit administration, sales management and on to Treasury Management.
Merchants agreed that this event presented an opportunity to rebuild Ellicott City better than it was before. Restauranteurs who had never met were holding meetings talking about restaurant business in Ellicott City. Merchants from different ends of the street who didn’t know each other before the flood have been working together post flood.