In both cases, [Summit- based] Hilltop Community Bank provided financing for build out and other activities. Because her company has operated since 1986 and has a track record, Civille was able to provide prior-year financial statements that bolstered her loan request.
Finance Climbing the ladder Financing a business presents different challenges for a startup, a growth company or an industry veteran. NJBIZ reporter Martin C. Daks talked to company leaders and their lenders to find out how financing strategies evolve each step along the way. To receive financing, startup companies must prove themselves early Christina Mazza By Martin C. Daks ness,” according to SBa’s Web Startup companieS may be vital to the site. “this ensures that, when nation’s economy, but to a banker, they also combined with borrowed funds, represent a big risk. the business can operate on a “most of the startups we finance come sound basis.” through a program with an SBa guarantee, since edgar and his partners also a startup has no track record,” said Tom Harrity, had to personally guarantee chief lending officer of Hackettstown-based Sky- they’d repay the loans, and had to lands Community Bank. “We ask for personal furnish personal tax returns and loan guarantees, and it helps if there’s some kind financial statements, a business of cushion, like a partner who works at a different plan, and other documents. in job to bring in cash while the startup takes off.” addition to huddling with a banker that’s the approach Brian Edgar took and an SBa representative, they when he and two co-owners applied for a Small also enlisted the aid of a lawyer and Business administration loan for an Elevation an accountant. Burger franchise in montclair. Bankers say they prefer startup an SBa loan will finance a portion of the chief executives to have some experi- store, and “the balance will be funded with ence in their field, but edgar says the When Brian Edgar, right, applied for an SBA-backed loan to help jump start the Elevation Burger franchise in our own cash,” said edgar, a former Bank of fact that he and his partners all had Montclair, he said he had to show previous financial experience, statements and tax returns to the Small Business America stock trader. finance backgrounds helped. Administration. Edgar stands alongside Elevation Burger shift supervisor Megan Lightner in the restaurant. owner’s equity, commonly known as “even though we didn’t have “skin in the game,” is a critical part of getting experience in the quick-service res- on our own, the bank would probably be more great idea, but they don’t do the proper research,” SBa to guarantee a portion of a business taurant segment, we each have a busi- hesitant about making a loan.” he said. “often, they’re overly optimistic. We ask loan, which can make a bank more comfort- ness and finance background,” he said. plenty of startups suffer from poor plan- them to scale down their assumptions, and then able about issuing the financing. “also, the elevation Burger franchise ning, said David S. Yanagisawa, chief lending ask what will happen in a worst-case scenario. if “Business loan applicants must have has a good national track record and officer at Lakeland Bank, based in the oak they don’t have a good answer, then they’re not a reasonable amount provides a lot of business support. that ridge section of Jefferson. likely to be a good credit risk.” u invested in their busi- makes a difference. if we tried to do this “Some entrepreneurs think they’ve got a E-mail to email@example.com A good banking relationship can aid when it’s time for expansion Keeping a banker happy By Martin C. Daks owner and a bank helps a lot, especially when a Bankers hate surprises, so an GAiL VAnCE CiViLLE likes to stay close company seeks expansion financing, said Mor- entrepreneur that keeps a lender in to her banker. it’s a philosophy that seems timer J. O’Shea, Hilltop chief executive. the loop improves his or her shot to work, since her product testing company “We want to understand their business at getting financing. here are some has picked up financing for two significant and their expansion plans,” he said. “are they things that make bankers happy: expansions in the last six years, both times going into a new product line, or a new geo- n Continuing, open conversations with the same
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