ROANNA HAGGITH
VANCOUVER ISLAND – Are you thinking about start up or early-stage financing? If you’ve found many lenders want to see at least two years of profitable financial performance before making a loan to a new business, don’t be discouraged. There are start up offerings out there. They vary from lender to lender, but there are a few helpful things to keep in mind.
A lot of consideration is given to you as a person. Be prepared to answer questions like:
- Do you have industry or relevant educational experience?
- What’s your personal financial picture?
- Do you have a good personal credit score?
- How many personal assets and debts do you have?
You may be required to pledge your own personal assets to support your guarantee of your business loan. If you share assets with your spouse, your spouse may also be required to guarantee the loan. Your own investment in the business also matters. Showing that you believe in yourself helps convince lenders to believe in you, too.
A great first step is to create a well thought out and realistic business plan. Consider including:
- What the market is for your idea
- Whether your idea is profitable enough to live off
- Who your competition is
You may have to pay for parts of your business plan, like market research and data, but having a fully fleshed out plan has value for you. It will help with cash flow projections and break-even analysis. Don’t forget to budget for a loan payment if you want to look for financing!
Having your plan reviewed by others before applying is a great idea. Family and friends can do it, but they may miss a key piece of analysis. Some start up lenders will require you to have your business plan reviewed by a third party in order to apply for start up financing. Getting an impartial review and refinement of your plan by a business coach will likely pay off for you in the long run.
If you have any questions about what Coastal Community has to offer, don’t hesitate to contact me at roanna.haggith@cccu.ca. I’m here to help.
Based in the Capital Region, Roanna Haggith is a Senior Business Relationship Manager with Coastal Community Credit Union.
