3 ways to get a small-business loan

The recovering economic environment has meant that small businesses have had to be more creative when looking for loans.

However, companies with sound business strategies still can borrow. Options include loans from traditional banks and institutions affiliated with the Small Business Administration, as well as financing from Internet-based lenders.

“For creditworthy, high-scoring small businesses, there is money available,” says George Cloutier, CEO of American Management Services, a consultant to small businesses.

Bank loans

The best place to get a small-business loan is still a bank, says Cloutier. Banks typically offer the lowest interest rates and many have established reputations as trustworthy lenders.

“Many small businesses try three or four banks and then stop looking,” Cloutier says. A more persistent approach has better odds of success.

Calculate business loan payment

Want to calculate your small-business loan payment? Go to Bankrate’s loan and amortization calculator.

“Take out the phone book, target 10 banks and work through that list,” he says.

That strategy worked for Michael McKean. He is founder of The Knowland Group, a company that helps hotels fill up their meeting space.

A few years ago, as the success of The Knowland Group grew, McKean began searching for a bank that would give the growing company expanded access to credit.

“We talked to every bank in our area, at least a dozen,” McKean says. “Many came back with proposals, but the terms were very onerous. Or sometimes they shifted terms.”

Finally, M T Bank came through.

“They just wanted to get our business,” McKean says.

McKean says his company did not approach M T any differently than it had approached the other banks. It was just a matter of being persistent until the right deal came along, he says.

“We did everything right, approaching the right person at each bank,” he says. “We’re a profitable business. I think it was just the … credit crunch that prevented us from getting a loan.”

Cloutier says the key to success with banks is to show past profitability, and to describe a well thought-out plan for future profits.

“If you aren’t making a profit now, you must be able to tell the bank how you will change that in the short term, or you really won’t be able to get a loan,” he says.

He also recommends that businesses start small in their loan requests.

“If you need money for four trucks, ask for two,” Cloutier says. “The bigger the loan request, the harder it is to get it approved.”

SBA loans

Another way to find a bank loan is through the Small Business Administration, or SBA. The SBA can direct you to banks that offer loans guaranteed by the agency. This way, you’ll have the advantage of approaching banks specifically interested in lending to small businesses.

Interested businesses should contact the SBA office nearest to them, which can be found on the agency’s website. Jeanne Hulit, the SBA’s acting administrator, urges businesses to seek a bank that is an experienced SBA lender.

Banks granting SBA loans place increased emphasis on business plans, cash flow and profit forecasts in deciding whether to lend, she says. The SBA also can refer businesses to free counseling centers to improve their performance.

Online opportunities

Another source for loans is the Internet. There are several sites where businesses can seek alternative lenders, such as individuals and small companies.

Interest rates are generally a little higher than what a bank will charge, but it’s much less than what you’ll have to pay on many credit cards.

Look around at different sites, some may charge a one-time fee to list your business, while others are free to list but might have fees reflected in loan rates.

If you’re going to list your company on one of these sites, describe your business in clear and concise language.

Lastly, make sure to investigate the company you are looking to post your business on. These kinds of companies were successful in 2008 and during the recession, but times have changed. Many have since gone out of business. Before paying for anything, make sure the company is legit.



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Mayland Community College is located in the beautiful Blue Ridge section of the Appalachian Mountains on the Avery/Mitchell county line just outside the town of Spruce Pine.

Mayland has been serving Mitchell, Avery, and Yancey counties for over 40 years.

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2017 Spooktacular contest winners

MCC’s 2017 Trick or Treat Spooktacular welcomed guests to the Mitchell Campus on October 26. Trick-or treaters participated in a candy trail, with games and activities and many joined the costume contest. Winners of the costume contest were in the Ages 0-6 years old category was Colton Phillips, age 2, as Grave Digger and in the Ages 7 up category was Colby Fisher, age 7, as Tonto. The Trick or Treat Spooktacular MCC Department table contest winners were Student Services who recreated scenes from the movie Grease.

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Mayland Community College is located in the beautiful Blue Ridge section of the Appalachian Mountains on the Avery/Mitchell county line just outside the town of Spruce Pine. Mayland has been serving Mitchell, Avery, and Yancey counties for over 40 years.



The Best Bank for Small Business in Canada: Business Bank Accounts

Best bank for small business

In Canada there didn t use to be much point in looking for the best bank for small business when you were looking for a business bank account; for years, the only difference between business bank accounts and personal ones has been that business bank accounts cost a lot more in fees.

But the Cyclopean eyes of Canada s big banks have finally alighted on small business banking and, having decided that small business owners are a worthy market, the banks are actually competing with one another to create business bank accounts that small business owners will find attractive – and that means creating small business accounts with lower bank fees.

Here are the best business bank accounts for Canadian small businesses based on their monthly costs so you can compare and decide which is the best bank for small business.

Business Bank Accounts for Low-Volume Businesses

If you don t have many transactions each month and don t need to write or deposit cheques much, you may be able to use the only free business bank account around, RBC s Small Business eAccount, which has no monthly fee, unlimited electronic account transactions each month and no minimum balance required.

However, standard fees apply to all non-electronic transactions, such as a $2.00 charge for every paper debit or cheque, a $3.50 charge for every paper credit or deposit and a $5.00 fee for every $1,000 cash deposited in-branch. So unless your clients are all paying directly through credit, debit or wire transfer, you may be better off springing for a business bank account that does have a monthly fee.

For instance, RBC also offers a Business Essentials $6 Small Business Account. The $6.00 fee does not apply if your transaction fees are more than $6.00 and the transaction fees decrease by the number of transactions; for example, if you make 1-10 paper based transactions, the transaction fee is $1.25 each but if you make 11-30, the fee decreases to $1.20 each.

You can also cut down on transaction fees by banking electronically; 1-10 electronic transactions are only $0.75 each.

The business bank account with the lowest monthly fee currently is the TD Basic Business Plan. Its $5.00 monthly fee includes five free transactions and five free deposit items each month. After that, each transaction is $1.25 and each deposit item is $0.22 and the first five of each type of transaction are free. Cash deposits are $2.50 per $1,000.

Six dollars seems to be the popular fee for low-volume business accounts. It s the monthly charge for Scotiabank s Right Size Account for business (with transaction fees of $1.20 through $0.85 each depending on how many transactions you make each month), BMO s Business Start bank account which allows you seven free transactions a month and CIBC s Basic Business Operating Account which does not allow you any free transactions each month and charges $1.25 for each full-service transaction you make and $1.00 for each self-service transaction.

Scotiabank also offers a Basic Business Account U.S. account which has a minimum account maintenance fee of $9.95 a month. In addition, you re charged for all your transactions on a pay-per-use basis.

Each cheque, for instance, costs $1.20, while each item deposited to your account costs $1.00. The interesting thing about this account is that you earn one free transaction by keeping a $1,100 minimum monthly credit balance, and you will pay no monthly account maintenance fee if your minimum monthly credit balance is $6,000 or over.

And If You re Not a Low-Volume Business?

You re going to pay more. Sometimes a lot more. Each bank offers a slate of business account offerings and their charges for what you get are comparable. There are no banking bargains.

Most Canadian banks offer a business account at the $20 monthly fee level which might work for you if you run a small retail business.

The Royal Bank s RBC Business Essentials Fixed-Fee Account is pretty typical of accounts offered. For a monthly business bank account fee of $20.00 you get:

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  • Up to 20 debits/cheques each month
  • Up to 15 credits/deposits each month
  • Up to 20 items deposited each month
  • Up to $2,500 cash deposited each month.

(They also offer three other Fixed Fee Plans at monthly rates of $35.00, $50.00 and $75.00, each with increasing numbers of transactions per month.)

The best of these accounts is the TD s Every Day Business Account. For $19.00, it gives you 50 deposit items and up to $5,000 in cash deposits, more than any other of the big banks.

From there, all the banks offer accounts with increasing monthly fees based on the number of monthly transactions.

The CIBC offers an Unlimited Business Operating Account which, as the name suggests, gives you unlimited transactions with a cash, coin and cheque deposit package for a $50.00 monthly fee. Looking at how few monthly transactions are included in most of the more inexpensive business bank accounts and how quickly additional transaction fees stack up, this may well be the most inexpensive option if your business has many monthly transactions.

Small Business Banking Packages

Another thing that complicates the issue of which is the best bank for small business is that some banks offer small business banking packages that bundle banking services.

Scotiabank s combo small business banking packages are of particular interest; they offer several business bank accounts that combine a personal and business bank account with other banking services, such as their ScotiaOne Account Plan. Besides the personal chequing and business bank account, the plan includes a business Visa card, a ScotiaCard and electronic banking for business.

Fees start at $49.95 per month.

The Best Way to Get a Free Business Bank Account

. is to maintain a monthly balance. But the required monthly balance to waive the account maintenance fee is often quite high.

As of time of writing, the account with the lowest required minimum monthly balance is the aforementioned TD Every Day Business Account. You won t have to pay the $19.00 fee on their Every Day A bank account if you maintain a minimum monthly balance of $20,000.

See What Business Bank Accounts Your Credit Union Offers First

There are also a great many Credit Unions operating in different regions in Canada. and you ll want to check with your local Credit Union to see what kinds of business bank accounts it offers. Historically, Credit Unions have had a strong interest in small business banking and your local Credit Union probably offers business banking accounts and services that are very competitive.

The Credit Union I use offers a $6.00 pay-as-you-go Business Chequing Account, a $10.25 Business Package that comes with 15 full-service transactions and four other business account packages with fees ranging from $19.95 through $99.95. Besides the range of packages, I also really like the fact that their transaction fees are lower than the banks in many cases. Check and see; this may be true of the Credit Union in your area too.

Small Business Banking Isn t All About the Fees

The most important feature of small business banking is the relationship you have with your bank or credit union manager, not the cost of your small business bank account, as sooner or later almost all small businesses need a business loan and/or a line of credit.

That being said, however, there s no point in spending money every month on small business banking services you’re not using or conversely, paying relatively high small business bank account fees and not getting the small business banking services you need.

Checking your business bank account and comparing it with the information on business bank accounts above could help you find a small business bank account that s a better fit for your small business and save you money.



Need cash?: Try these top Main Street lenders

Despite heightened enthusiasm for small-business lending in the banking sector, it’s not easy for mom-and-pop firms to get a U.S. Small Business Administration–backed loan. And it’s not just because small-business loans require a lot of paperwork. Banks tend to favor larger deals, which are more profitable for them. So if you’re a small-business owner hunting for a lender, it helps to know which banks aren’t just talking the talk but are walking the walk when it comes to making small-business loans.

There are some surprises. While big banks still top the list when it comes to issuing greatest dollar volume of loans backed by the SBA and in the sheer number of loans made, some smaller banks are aggressively going after Main Street entrepreneurs.

Best bank for small business

Of the top lenders signing SBA-backed loans of $150,000 and under are Wall Street banks JPMorgan Chase (No. 1 on the list) and Wells Fargo, as well as some smaller players, including Celtic Bank and Zions First National Bank, according to SBA data for the 12-month period ended Jan. 31, 2014.

Larger banks still dominate when it comes to making loans of $1 million and under (which also include those loans under $150,000), but some smaller banks are gaining ground in that category, too. Take, for instance, this list’s No. 14: Ridgestone Bank, a subsidiary of Ridgestone Financial Services, which received money through the recession-era TARP program.

Big banks can be particularly stringent in lending to small business. Biz2Credit, a matchmaker between borrowers and lenders based in New York City, found in its January 2014 index that big banks using its platform approved 17.8 percent of small-business loans compared to small banks, which approved 50.9 percent.

SBA 7(a) Loan Program Top Lenders 2013 ($150K and under)

In fact, the data shows that it’s only the larger-dollar-value small-business loans that grew in the recent 12-month period. In the SBA 7(a) loan program, used for working capital, the number of deals for $150,000 or less declined from 25,485 in fiscal 2012 to 24,923 in fiscal 2013, and loan volume stayed relatively flat at $1.4 billion.

The number of SBA 7(a) loans of $1 million or less rose in that same time period, from 40,496 to 41,694, with volume increasing from $7.6 billion to $8.5 billion.

This trend has created an opening for scrappy smaller players, including Salt Lake City, Utah–based Celtic Bank, which is lending across the country.

“We definitely have stepped up our lending,” said Craig Calafati, executive vice president of business development at Celtic Bank. “We made a very strong commitment to the underserved small-business community, particularly in making loans under $150,000.”

To keep the loans flowing, Celtic Bank has built an online application into its website.

SBA loan approval overview

Small banks have a big financial incentive to go after SBA loans.

They profit from selling the loans they originate on the secondary market, where the deals are bundled and snapped up by institutional investors, such as pension funds, hedge funds, and private investors looking for safe deals.

“Banks make a very good premium of 12 percent to 16 percent,” said Rohit Arora, CEO of Biz2Credit. “That’s a big motivation for small banks to do these loans.”

His prediction: “In the next six months, you will see more small banks coming into this space.”

“It gives them the ability to make loans, retain liquidity and limit some of their risk exposure to the loans,” said Craig Cline, managing director and head trader on the government-guaranteed loan desk at Coastal Securities, a financial services firm in Houston that is active in the trading, securitization and analysis of SBA loans and pools.

SBA 7(a) Loan Program Top Lenders 2013 ($1M and under)

Some small banks are also selling their loans to big banks, said Brendan Ross, president and portfolio manager at Direct Lending Investments, a private investment firm in Los Angeles that owns notes on loans made by alternative lenders.

“The [small] banks can’t afford to warehouse them,” said Ross. “They are like glorified brokers.”

“It does allow us to recycle those dollars back out,” said Eric Petersen, executive vice president of corporate development at Celtic Bank. “It allows an institution like ours to make a lot more loans than we would be able to.”

Celtic Bank sells most of the loans it originates on the secondary market but remains the primary contact for servicing them, Calafati said.

Party like it’s 2009?

Banks aren’t the only place to get SBA loans. They are also available through nonbank lenders and credit unions.

Nicole Zinn, owner of Rocket Electrics, an electric-bike shop in Austin, Texas, won an SBA-backed loan for $180,000 from Austin-based Amplify Federal Credit Union after working with an advisor at the Texas State Small Business Development Center to revise the shop’s business plan and put the loan application package together.

Zinn founded the business in 2011 after losing her job in high-tech marketing during a corporate restructuring; it became profitable four months after it opened. “I didn’t want to go back to a cubicle,” she said.

Zinn applied for a loan to expand her inventory in July 2013, then saw her application stall during the federal government shutdown in October 2013. Finally, in November 2013, after the government reopened, Zinn won the loan, which she was more than ready to put to use in expanding the business.

“When the loan process takes so long, your need grows,” she said.

By Elaine Pofeldt, Special to CNBC.com

(For more on the banks leading in lending under the SBA’s 504 program—loans for fixed assets, including real estate and equipment—consult the charts on the following page.)



Best banks for business

Best bank for small business

When it comes to business banking, working out which financial service institution best suits your needs can be a tricky affair.

South Africa s big banks each offer various accounts tailored towards businesses, and each account has structures, fees and added services catering for specific needs.

Best bank for small business

First National Bank s business account has two payment options: a fixed-fee bundle account which offers a number of transactions and services for a fixed monthly fee or a pay as you use (PAYU) option.

The fixed-fee payment plan costs R169.00 per month, and bundles 30 electronic debit transactions (subject to a maximum of 5 FNB ATM Advance withdrawals) and 10 cash deposits (as long as they re at FNB ATM Advance terminals).

According to FNB, its business account is suited to sole proprietors, partnerships, close corporations, companies, incorporated businesses, trusts and co-operatives.

The bundled transactions do not include cheque transactions; branch transactions; online banking enterprise; non-FNB transactions; as well as any special instructions or penalty

fees, which are all charged at PAYU rates.

Best bank for small business

Absa offers the Small Business Cheque Account and the Absa Biztransact Account with the latter being a current account for small businesses which require a transactional account, but have no immediate need for a cheque book or overdraft.

The fees associated with both accounts remain similar, with the exception of the cheque-book and overdraft fees attached to the cheque account.

Absa s Business Internet Banking (BIB) is charged at R105.00 per month, and the bank offers small businesses its Absa Business Essentials software package (QuickBooks Pro; planning, marketing and business and software skills courses) for R185.00 per month.

Best bank for small business

Nedbank s business account offers a full-featured current account specifically designed for small businesses, according to the bank.

It s a pay as you use account, that provides banker services to assist with specific business needs, as well as customizable Internet banking.

Best bank for small business

Aside from Standard Bank s business banking current account, the bank has also targetted business start-ups and entrepreneurs with its Bizlaunch account.

The Bizlaunch account provides many of the bank s electronic transactions and services in a bundled package and is available for a fixed monthly fee of R90.00 for the first 12 months of opening your business.

The bundled services include eight ATM cash withdrawals and unlimited cheque card purchases, electronic account payments, debit orders, inter-account transfers and others.

The account includes a merchant device for R325.00 a month, at a 3.25% commission rate as well as a wealth of other services to kick-start a business. Once the 12 month window is over, the Bizlaunch account converts to a transactional business account.

Best bank for small business

Capitec does offer business services to banking customers, but does not offer any business account.

We don’t provide business banking for close corporations, companies, partnerships or trusts, the bank s website states.

Capitec is thus not included in the following comparisons.

Business accounts, head-to-head

When it comes to comparing business accounts with each other, all of the various offerings listed above should be taken into consideration.

However, in the end, it boils down to fees. Who is charging you the most to do the most basic or most common transactions?

In this instance, BusinessTech is looking at PAYU fees when dealing in specific transactions to give a clearer picture as to which bank provides the best value.

A bank s monthly fees differ depending on the account one uses (service fees, overdraft fees, internet banking fees, etc). The fees depicted below are the rudimentary amounts taken each month for the account to simply exist.



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The right way to apply for a business loan

If you don’t already have a business loan, you’ve probably considered applying for one. Here we’ll take a look at the best way to prepare a loan application, to give your small business the best chance of gaining a foothold on the ladder to success.

  • Contact a business manager
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A good start is certainly half the battle – this is especially true when it comes to preparing your loan application. Getting an early start can mean the difference between the best deal for your business and agreeing to poor terms. If you have a date in mind for starting up your new venture or expanding your current business, it makes sense to start planning a couple of months ahead.

Westpac has some great free business tools such as a cash flow forecast and a handy checklist to help you calculate the cost of starting up a new business.

Banks will take a look at your company’s credit rating and review your personal credit history if your business is a start up, or less than three years old. This means that any unpaid credit card bills or missed mortgage payments can have a detrimental effect on your application.

Your credit details are held by three main reporters in New Zealand, namely:

Consider checking your personal and business credit reports from each of these reporters. If you find any discrepancies, it’s within your rights to dispute these errors and the Citizens Advice Bureau have a great section explaining this process in full.

A good business plan takes time to develop and is an essential part of your application. Until you have your business plan prepared, whether it’s for a start up or a growing business, you’ll have no real idea of the capital needed to move ahead with your plans.

A great guide is available from New Zealand Trade and Enterprise (NZTE) that clearly outlines exactly what is expected from a business plan and how to go about developing your own.

Once your business plan is in place you’ll have a clear indication of the amount of money you’ll need to borrow. Your business plan and presentation will outline your goals for future growth but you’ll also need to explain how you’re planning to spend each dollar you borrow. Most importantly, you’ll need to detail how you plan to make repayments.

If you’re investing in new equipment such as company vehicles, it’s a good idea to have the exact figures on the purchasing and running costs of each vehicle. You might also want to explain why a particular vehicle is a good fit for your small business. Reliability, size, and value for money are some of the reasons you could list.

Ensure your plans for repayment are reasonable and that you’re not over-stretching your budget. Making an application for an outrageously large amount of money will most likely see your business labelled as a time waster.

Plan your presentation

First impressions count – when you meet your loan officer for the first time to present your business plan, there are a few things you can do to make that meeting run smoothly.

  • Present your loan officer with a professional presentation package that includes financial projections, previous statements, and an executive summary outlining your business objectives and how the loan can help you achieve those goals.
  • Try to predict any possible questions your loan officer may have and prepare your answers. Your calm and confident demeanour will instill a feeling of mutual trust.
  • You need to sell your business idea to your loan officer. Show them how confident you are about the future growth and prospects of your business.

Like personal loans, business loans offer the ability to choose from:

  • Fixed interest rates – these have the same repayments for the entire term of the loan. They’re great for businesses that need to know the exact amount of each month’s repayment.
  • Floating interest rates – these enable you to pay off lump sums at any period during the loan term, or change the repayment amount from month to month. They’re a better option for businesses that are hoping to pay a loan off quickly but unable to make higher repayments over the long term.

Remember, business loans usually require some form of security and even if you hold a commercial property, a business owner’s residential property may be used as security.

Westpac’s current lending criteria apply.

The content of this material is for general information purposes only. It does not take into account your personal finance situation and goals, and should not be relied on. We recommend you seek independent legal, financial and/or tax advice. All opinions, statements and analysis expressed are based on information current at the time of writing from sources which Westpac believes to be authentic and reliable. Westpac issues no invitation to anyone to rely on this material and intends by this statement to exclude liability for any such opinion, statement and analysis. Advice, opinions and information from third parties constitutes an expression by those third parties only and Westpac is not responsible for the accuracy or reliability of such advice, opinions and information. Westpac is not responsible for the information on any other site accessed via this website; that information is the responsibility of the owner of that site and Westpac has no control over it. Links to other sites are provided for convenience only and Westpac accepts no responsibility for the availability or content of such websites.