Case Studies – I need a loan to expand

Situation:

One of my clients has been in business now for three years and has experienced the normal rapid growth all of my clients experience. She has moved her business to a location that allows her to benefit from the foot traffic of like and kind businesses and has increased staff for this store front business. The increase in foot traffic leads from this move coupled with the increase in leads from the bridal shows she is attending is prompting a need for more employees. We are also creating an on line web based capability that I am predicting will triple her business next year. All of this needs to have an upfront infusion of cash which is necessitating the need for bank financing.

Analysis:

1. Owner has had increasing revenues from day 1 of her business after she established herself outside of her home in her initial location.
2. Owner has expanded her offerings and her clientele according to constantly increased exposure to more leads.
3. Owner needs more employees to handle the increased volume of leads she is generating and to handle the foot traffic at her new location.
4. Owner has excellent credit history and credit score.
5. Owner has loans outstanding now that will be consolidated into the new loan.

Solution:

We contacted three banks and one credit union servicing organization (CUSO). ASBC worked with the owner to prepare all required documents for the loan officers we contacted and then accompanied the owner to all initial meetings with the loan officers to answer all questions about the owner and the business. ASBC prepared the pro forma for all the loan officers and had to modify several items required by the banks to fit their application process. The loan was granted by one bank for the full amount, granted by another bank and CUSO for a reduced amount, and denied by the third bank. The owner agreed to the terms of the approved loan which included consolidating all other outstanding debt instruments into the new loan which reduced her monthly cash flow. She immediately began interviewing for the busy bridal season coming up and will expand her business at her present location. She is now on track to triple her earnings for the coming year and is looking at the purchase of a business location which will allow her to expand her business again.