This document provides an overview of various types of bank financing options for small businesses, including lines of credit, term loans, SBA loans, commercial real estate loans, and equipment financing. It also discusses how to improve credit scores and the requirements for applying for business and residential loans. The presentation was given by Anna Xiaodan Zheng from Chase Business Banking to discuss financing options and requirements for Asian women business owners.

1. Asian Women In Business
Bank Financing for Small Business
Presented by Anna Xiaodan Zheng
Business Banking Manager, Chase Business Banking
xiaodan.x.zheng@jpmchase.com

2. Business Line of Credit
• For business that needs to borrow on a revolving credit line basis for
working capital (normally use it for short-term or immediate capital
needs), Ex: Seasonality, Immediate cash flow needs, business expansion,
time frame for account receivables, etc.
The Benefits of Line of Credit:
o Using other people money to invest for your own business (Leverage)
o Access the money when you need it ( funds available immediately)
o Ease the pressure for short-term cash flow, more capitals to manage
o Low cost, tax deductible (expenses for the interests & fee).
o It is an umbrella for unexpected rain

3. Features of line of credit:
• Interest rate is Variable
• Available Credit Line Amount: $10,000-$250,000
• Rate Pricing may base on credit history, collateral type,
business relationship & business categories, also refer to
revolving rate.
• Collateral Options- can be secured or Unsecured
• Monthly minimum payments are required and
repayment replenishes line availability as long as
revolving status continues in good standing
• Is supported by the personal guarantees of the owners /
principals, or other Business

4. How to Access to line of credit:
• access card with cash back rewards
• Line of credit checks
• Phone transfers to Business Checking account
• Website
• Transfer in any branch locations

5. Business Term Loan
Borrowing over a specified period of time, (normally use it for
specific needs in specified time), such as purchase equipment,
renovation, consolidating existing loans.
Features of Term Loan:
• Fixed or variable rates of interest
• Variable, indexed to prime rate, pricing based on the credit
history and business banking relationship
• Range of terms: 12 months – 84 months
• Loan Amount $5,000-$250,000
• Principal and interest payments are repayable in convenient
monthly installments
• Fixed monthly payments of Principal and interest

6. Other type loans
Owner Occupied Commercial Real Estate Loan:
For purchase or refinance of a commercial property that is at
least 51% occupied by borrower.
• Minimum Amount $50,000- $3,000,000
• Maximum Loan to value is 80% of property types
• Fixed rate fully amortizing loan available for up to 15 years,
Balloon Loans may have an amortization up to 25 years
• Adjustable rate loan typically adjust every 3, 5, 7 years at a
margin over the US Treasury Constant Maturity Yield

7. Equipment Financing
• Get money to buy business’s equipments.
Benefits of financing
- No down payment or minimum down payment
- Financing through all the costs, examples of shipping, installation, training
- 2-5 years terms, ( fixed monthly)
- Saving money on start-up capitals
- Tax advantage ( depreciation, maintenance expenses)

8. SBA- Small Business Administration
SBA Express:
• Loan amounts: $10,000-$350,000
• SBA will guarantee 50%
SBA 7 (A):
• Loan amounts: $250,000-$500,000.
• SBA will guarantee up to 75%
• Working capital, inventory purchasing, Account receivable cash flow cycle,
Business expansion, debt refinance, real estate improvement, or business
acquisition, etc.
SBA 504:
• Up to 40% or $5,000,000.
• Real estate financing( land and building)
• Construction and improvement
• Heavy Machinery

9. 5 C’s – Evaluate Risks
• Character- The willingness of the customer to
repay. The principal of Character is honorable and
trustworthy.
Observed in the way relationship are handled with
-Suppliers
-Customers
-Employees
-Creditors

10. 5 C’s – Evaluate Risks
• Capacity- the Ability of the customer to repay
The point of financial analysis is to determine
whether or not a borrower is able to repay the
obligation
Measured by calculation- debt service, debt to
income ratio,
The source of repayment

11. 5 C’s – Evaluate Risks
• Capital- the Funds that support the assets and
operations of a company
 Sources of funds – sufficient to support
 Normal Operations, Economic Downturns, Potential Losses, expected
growth
 Funds from Owners (Personal, Investors, or Creditors)
Preserved cash VS Liquidity & Leverage

12. 5 C’s – Evaluate Risks
• Collateral – The assets which provide a
Secondary Source
• Collateral types
 Account receivable 70%
 Inventory 40%
 Equipment 50%
 Marketable Securities 65%
 Cash 100%

13. 5 C’s – Evaluate Risks
• Conditions- The Operating Environment of the
company
• Measure by various conditions:
o Government regulations
o Economic Cycles
o Competition
o Consumer Preferences
o Labor Challenges
o Industry dynamics

14. The Sixth C- Common Sense
• Business owner who can’t explain how they
make money
• Does their business make sense to you
• Should it be..
 Reasonable
 Logical
 Defensible

15. How Credit Score Computed

16. Tips to Improve your credit score
• Use two or three credit cards each month and make payments on
time.
• Do not max out your credit cards. Attempt to keep your balances
below 30% of your credit limit. This will present a healthy debt-to-credit
ratio to lenders.
• Do not cancel old credit cards b/c they carry the longest length of
your credit history.
• Do not apply for new credit on a whim. Each time you submit an
application to a lender or credit card company they pull a copy of
your credit report. This is called an inquiry. Too many inquiries in a
short period of time can lower your credit score.

17. Credit Bureaus
• www. Annualcreditreport.com
• Equifax 1800-685-1111
www.equifax.com
• Experian 1888-397-3742
www.experian.com
• Trans Union 1800-916-8800
www.transunion.com

18. Banking Document Requirement
• Business Certification, Federal Tax ID Number
• Government- issued Photo ID
For Loan or Line
Business Tax Return
Personal Tax Return
Personal Financial Statement
Interim Balance Sheet and Income Statement

19. Residential Mortgage required
documents
• 2012 &2013 tax return (Personal & Business);
W2s/or 1099
• Signed year to date profit & loss statement
• Most recent two months bank statements
• Recent one month paystubs (if applicable)
• ID copy
• Executed sale of contract (For purchase)

20. Exclusive benefits for residential
mortgage
• 1% Mortgage Cash back on annual principle +
interest payment (up to $500)
$2,000/month * 12=$24,000/ year
$240 per year
* Set up mortgage payment automatically deducted from a Chase personal Checking
account within 60 days after closing to qualify.
• LMI (low-to-moderate income)
up to $1,500 for Purchase only

21. Asian Women In Business
42 Broadway, Suite 1748
New York, New York 10004
Tel: 212.868.1368 - Fax: 877.686.6870
Email: info@awib.org