Baylake Bank Provides Loan Tips for Small Business Start-up, Expansion   Upfront work increases approval rates; better tailors loan to needs
May 29, 2002 Sturgeon Bay, WI-	Adapted from an article by Harry J. Argue, Executive Vice President/CEO,     Wisconsin Bankers Association In starting or expanding a small business, numerous risks must be overcome if the venture is to prove successful. Among the hundreds of issues are three crucial threats of: a) underfunding; b) overfunding; and c) inappropriate structuring of start-up or expansion capital. An experienced banker can help you do it right.  Baylake Bank Loan Officer Jamie Alberts comments, “Baylake Bank was recently recognized by the Small Business Administration for producing the greatest volume of loans in 2001.  The #1 Volume Asset Lender Award was for financial institutions within the $501 million - $1 billion in asset category.  Our range and depth of experience means that we can serve as a resource for our customers, no matter what stage of business they are in.”  Following are several tips to help the start-up or expanding business achieve their goals: Securing start-up or expansion funding is but the first leg of the race. An entrepreneur must quickly produce sales revenue adequate to create positive operational income. This income must cover staff salaries and benefits, rental/lease payments, debt service, insurance, suppliers, advertising, taxes and many other expenses. Clearly, any significant miscalculation in projected sales, costs or demand for the product can spell financial disaster. These challenges are particularly acute in the first three years following either a start-up or expansion. The pressure often leads to business failure. One important contributing factor is managerial inexperience combined with a lack of thorough planning before the project was embarked upon. Proper financial pre-planning is crucial. This is where your bank can be of significant assistance. Its financial, technical and commercial lending expertise can assist in determining just what type, amount and structuring of funding is most advantageous to your idea. Generally, if a business concept is sound and you've performed some of the initial research and pre-planning, a detailed loan application package can be designed which is aimed at specific sources of business funding. The following are important preparatory steps for you to begin before visiting the bank loan officer. Importantly, this research information is among the same critical documentation the bank needs in deciding whether to grant your request, and it will greatly aid you in managing the business more effectively: 1. Realistic market research: To determine feasibility and identify competition and threats; 2. Realistic financial analysis: To prepare a basic business and pricing plan, analysis of cashflow, set key financial benchmarks, prepare financial and operational projections; and, 3. Realistic business planning: To establish both short- and- long term planning goals to minimize misguided early decisions. Such decisions often spell doom for firms as they find themselves forced into a corner by early decisions and commitments which limit the venture's ability to respond and adapt to unforeseen circumstances. It is here -- in the stages prior to the actual loan application -- that your bank can be a particularly strong resource in properly structuring potential financing. Those borrowers who work with their banker in advance research, preparation and documentation of key financial, marketing and business plan data can vastly increase the likelihood both of loan approval and ultimate business success. You must also be able to persuasively describe your idea and its income-producing potential when you proceed to the loan application and consideration stages. Therefore, your documents should include a brief business plan for how you'll use the money you seek; how your idea has the potential to turn a profit; what, who and where are the markets for your product or service; and preliminary financial statements and projections. In your projections, summarize anticipated levels of income, expenses and net profit quarterly, annually and for three years. Identify loan collateral, projected business assets and business debts. Producing these initial documents can be a daunting task without help. That is why three years ago the Wisconsin Bankers Association created the statewide WBA TEAM NETWORK, or, Technical Economic Assistance Mechanism. TEAM is an innovative loan consulting program that analyzes business loan applications and business plans in order to suggest the most effective package of funding. A representative of WBA TEAM NETWORK works directly with the bank and the potential borrower to provide a detailed analysis of the business potential of your idea and to identify potential funding methods. Of course, not every loan application will be funded, but in 1995 alone, WBA TEAM NETWORK successfully helped to create nearly 75 jobs statewide. Of these projects, seven involved business start-ups. Your suggested loan package might include straight bank loans, or a bank loan coupled with or partially secured by programs of the federal Small Business Administration (SBA), Wisconsin Department of Development (DOD), Wisconsin Housing and Economic Development Authority (WHEDA), and/or others. Some of these programs are specially targeted to help finance minority and disadvantaged borrowers who have a sound business idea. For more information, contact Jamie Alberts at Baylake Bank, (920) 743-5551, ext. 1040.

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