At the Barrel Thief, HomeStreet Bank’s Debbie Webber talks loans with members of the Fremont Chamber of Commerce. Photo by Adrian Laney, Jan ’15
Last week the Fremont Chamber of Commerce hosted a presentation on commercial loans for businesses, given by Debbie Webber, VP Commercial Relationship Manager for HomeStreet Bank, and Teresa Murphy AVP of Commercial Relationship Manager, also with HomeStreet. At The Barrel Thief, Webber and Murphy talked about what it takes to build a financially healthy business, and getting a loan to help to grow it.
At HomeStreet, they will sit down and educate business owners (and prospective entrepreneurs) about what it takes to get a loan, and build their business. As Webber repeatedly remarked, it is her job to see that she loans money to businesses – and that they will be able to pay back the loan. “You’re here to run your business,” Webber said, “We’re here to support that.”
Teresa Murphy, a Commercial Lending Relationship Manager with HomeStreet Bank, can talk with business owners about how to grow. Photo by Adrian Laney, Jan ’15
In order to get a loan, a business owner needs:
- industry knowledge, including identifying the particular niche their business fills, awareness of other businesses in the same industry, information on products and/or services they sell, and who clients/customers are. HomeStreet, according to Murphy, can loan to all kinds of industries. “We can be very flexible,” she said.
- financial acumen, with projections, an understanding of the cash flow, a clear idea of how much will be needed and where the money will go. Not knowing how much of a loan a business needs is a red flag that the owner isn’t ready to discuss a loan seriously.
- a comprehensive business plan (not long, maybe one or two pages) that serves as a roadmap to where the business can go, and has been written or revised within the last year
In addition to this, business owners can expect to give personal guarantees and to demonstrate (especially if they need money for a start-up) experience in the industry they want to enter. Murphy and Webber won’t tell business owners how to run their business but they do want to know that they are loaning to someone who can articulate a knowledge of their industry. Also, applicants do not have to bank with HomeStreet, but they should expect to be asked!
Before and after the discussion of banking, at the January FCC meeting, there was time to meet and network – and enjoy the delicious eats provided by The Barrel Thief! Photo by Adrian Laney
Finally, Webber and Murphy were asked when they won’t loan money – and the indicators they’ve seen that a business might be better off to close (or scale down) rather than taking a loan and sinking deeper into debt. Webber noted these signs of danger ahead:
- a business behind on paying taxes
- an owner that isn’t getting paid
- an owner/manager that must work 80 hours a week, and yet they still don’t see progress on #1/#2
- a business that wants a loan to cover going out of business expenses
It may not be the end of the business dream, however, because you can change and shift focus. Webber and Murphy encouraged all business owners to come in and talk. They can also want to hear from business owners that encountered problems in their business in the past, and survived, because this shows their ability to change their focus.
“We are not just about loans,” Murphy said, “it is about helping.” It can be as simple as a 20-minute conversation to figure out how they can help. As Webber observed, “if you get the wrong type of loan,” one that balloons at the wrong time, or needs constant repayment, “it can get your business into a mess.”
Webber recommended business owners also consult the SCORE website, which has easy to fill out balance sheet worksheets, along with the Small Business Development Center (SBDC) and the Small Business Administration (SBA) websites. If you want to talk with HomeStreet about a business loan, contact Debbie Webber at 206/442-5370 or Teresa Murphy at 206/753-2111.