A bank may not lend money for several reasons: lack of a solid business plan, inadequate experience of the business owner, lack of confidence in the borrower, or insufficient personal investment in the business by the entrepreneur. The document discusses obtaining financing through bank loans, Small Business Administration loans, and equity capital. Bank loans can be secured by collateral or unsecured. SBA loans have requirements such as the business being considered small and the owner being unable to get financing elsewhere. Other sources of financing discussed are small business investment companies and state or local government programs.

1. REASONS A BANK MAY NOT
LEND MONEY
Joseph Fabiilli

2. FINANCE, PROTECT, AND
INSURE YOUR BUSINESS
Put Together a Financial Plan
Obtain Financing for Your
Business
Protect Your Business
Insure Your Business

3. Review
What are the one time only expenses
that are paid to establish a business
Start-up costs
Describes how much cash goes in and
out of a business over a period of time
Cash flow statement
Expenses that are incurred by a
business every month
Operating expense

4. Review cont.
A financial statement that shows how
much money a business earns or loses
Income statement
Shows the assets, liabilities, and capital of
a business at a particular point in time
Balance Sheet
What is the accounting equation?
Assets= Liabilities+ Owner’s equity

5. Review cont.
Types of Assets
Fixed, current, A/R
Types of Liabilities
Long-term, current, A/P
The amount a company estimates it will
not receive from customers
Uncollectible accounts
Lowering of an assets value to reflect its
current worth
depreciation

6. OBTAIN FINANCING
FOR YOUR BUSINESS
Consider different types of
bank loans.
Explain Small Business
Administration loans.
Evaluate other sources that
can provide debt capital.
GOALS

7.  Many companies take out loans from
banks. You obtain debt capital when
you borrow from banks. Debt capital is
money loaned to a business with the
understanding that it will be repaid, with
interest, in a certain time period.

8. BANK LOANS
Types of bank loans
Secured loans
Unsecured loans

9. Secured Loans
Secured loans are backed by
collateral, which is property that the
borrowers forfeit of he or she defaults
on the loan.
Types of secured loans
Line of credit- money whenever the
borrower needs it.
Short-term loan- made for a specific
purpose; repaid within a year.
Long-term loan- payable over a period
longer than a year.

10. Unsecured Loans
Loans that are not guaranteed with
property. These loans are only made to
the bank’s most creditworthy customers.

11. REASONS A BANK
MAY NOT LEND MONEY
The business is a start up- has no record of
repaying loans
Lack of a solid business plan- poorly written
Lack of adequate experience
Lack of confidence in the borrower
Inadequate investment in the business-
banks are suspicious of entrepreneurs who don’t
invest their own money

12. SMALL BUSINESS
ADMINISTRATION LOANS
SBA loan assistance
Requirements of SBA loans
Apply for an SBA loan
www.sba.gov

13. REQUIREMENTS OF SBA LOANS
 Your business must be considered a small business.
 Your business must not be the leader in its field.
 Your business must comply with all federal
employment laws.
 Your business cannot create or distribute ideas or
opinions.
 You must have been unable to obtain financing from
a commercial bank.
 You must invest a reasonable amount of your own
money in the venture.
 You must provide adequate collateral.

14. OTHER SOURCES OF LOANS
 Small Business Investment Companies—
SBIC
 Minority Enterprise Small Business
Investment Companies—MESBIC
 Department Of Housing And Urban
Development—HUD
 Economic Development Administration—EDA
 State governments
 Local and municipal governments

15. FINANCE YOUR BUSINESS
WITH EQUITY CAPITAL
Equity capital is money invested in a
business in return for a share in the
business’s profits.
Sources of equity
Personal financing
Friends and family
Venture capitalist- people or companies
who make a living by providing loans to
start-up businesses

16. THANK YOU