NPE
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Transcript of NPE
Become a BusinessCredit & Funding Ninja
Learn Your Borrowing Options & How to Treat Your Credit as an Asset
PURPOSE• Why are we here?
Build a profitable and valuable business
Peter Drucker
a) Purpose of business is to create…
b) Two functions of any business
SMALL BUSINESS LANDSCAPE
• 28,000,000 Small Businesses in the U.S.
83% - Less than $100,000 in Annual Revenues
6.1% - Between $100,000 - $300,000 in Annual Revenues
4 out of 100 reach $1,000,000 in Annual Revenues.
4 out of 1,000 reach $10,000,000 in Annual Revenues
• 80% fail in First 5 Years acc. to Michael Gerber, author of The e-Myth Revisited3 Reasons Businesses Fail
Resources vs. Resourcefulness
SMALL BUSINESS LANDSCAPE
“ Coaching is mostly about developing the capabilities of high-potential performers and/or
assisting with transition & growth.”
- HBR
COACHING
OUR 2 GOALS FOR TODAY
1. Begin to Treat Your Credit as an Asset
What it means & doesn’t mean
Is your credit an asset or a liability?
The ONLY reason we really care about credit
2. Understand Your Borrowing Options (beyond the bank and SBA)
Bank & Non-Bank Options
Loans vs. Lines of Credit
When to get your Loans vs. when to get your Lines of Credit
Credit Card usage
OUR 2 GOALS FOR TODAY
FINANCING OPTIONS
There are ONLY 2 ways you can finance your business
Equity or Debt
The Case for Equity
The Case for Debt
HOW MUCH $$ PEOPLE NEED
Acc. to Lendio 59% of their site visitors needed $50,000 or less to fund their businesses.
Our experience - $50-150k
Lines of Credit vs. Loans
Les McKeown’s suggestions on how much money to get for your business
THE COST OF BORROWING
Excellent Credit Not Great CreditLoan Amount $100,000 $100,000Term 10 Years 6 MonthsRate/Cost 6.00% 1.3Monthly Payment $1,110 $21,665Daily $50.45 $984.77Total Cost at Term $133,225 $130,000Total Cost 6 Months $102,954 $130,000
PERSONAL CREDIT
FICO Score Factors
Available Credit
Payment History
Length of History
Number of Inquiries
Type of Credit
Rise in importance of Business Credit
Beware of deceptive Biz Credit Sales Tactics
Business FICO/SBSS Scores – 0 to 300
BUSINESS CREDIT
SBA LOANS
Approx. 60,000 7a loans approved every year
60,000 / 28,000,000 = 1/467
SBA Loans looking for:Good Credit Strong Cash Flow
Collateral Liquidity/Reserves
Startups Okay (sort of)
GOALS OF BORROWING
Access Capital
Separate Personal & Business Credit
Protect, Preserve, & Improve Your Credit Profile
Cash-Flow Friendly Financing
Minimize Interest Expense
Maximize Tax Benefit
GOOD USES OF FINANCING
Purchase Assets - 10% down pmt for building, acquisition, etc.
Equipment – do more, do faster, do quicker, etc.
Working Capital
RGA or improving Cash Flow
RECENT DEALS
Ms. Johnson in NJNeeded tractor trailer540 FICO ScoreCurrently Past Due on MortgageApproved for $60,000 to buy TT
Mr. Durham in PANeeded Startup fundingGot him $132,000 approved in 5 daysLines of Credit - No collateralBuying & rehabbing Laundromat
Ms. Luetkemeyer in AZBuilding sales software & training Biz18-30 month mark$425,000 with only a UCC
Mr. Haedrich in CA$402,500 in 10 monthsNo Collateral$150k unsec loan$252,500 in unsec. LOC’s
NEED FUNDING?
Goto http://netprofitexplosion.com/lencred/
Get Free Report – 16 Best Business Financing Options