Locations & ATMs
Business Banking
Jun 6, 2023
Building a business costs money — usually more than you can generate from your operating revenues alone. Securing the funds you need will require careful planning and preparation.
Whether you’re a fully operating business looking to add a new truck to your fleet, build a new location, or just starting out, you’ll need money to turn your plans into reality. It might help to work with an accountant to calculate estimated costs for reaching the next level of development.
The Basics
Before you borrow, list your basic business expenses. Each time you expand your business, these costs are likely to increase:
One option to increase your funds is to get a line of credit, which is a type of loan that gives you short-term or seasonal funds.
Basically, a line of credit is very similar to a credit card, with the notable exception that interest on a line of credit is lower and may be tax deductible. You borrow cash, using your business assets as collateral, and pay back the principal and interest on any outstanding balance each month.
A long-term credit loan usually lasts up to five years and is helpful if you want to have money for operating costs until your business turns a profit. Lenders typically require that you provide collateral or sign a promissory note on this type of loan and pay it back in installments.
Credit Cards
Visa®, American Express®, and Mastercard® all offer credit cards aimed specifically at small businesses. These cards offer lower interest rates than normal credit cards and often have higher credit limits. The Bank of Elk River offers multiple business credit card options with benefits from low rates to cash back to flexible rewards.
Loans
If you’re thinking about taking a loan to build your business, there are several qualifications that banks expect from you, as the owner, and your business. Before you apply for a loan, make sure that you can provide potential lenders with the following:
Having a strong relationship with a specific institution is a good business practice, as that could make it easier for you to get loans when you need them. If you don’t use one particular bank, you might want to open a business banking account or secure small lines of credit before applying for a large loan.
A Little Help
Since 1993, the Small Business Administration (SBA) has extended Microloans to businesses to help finance machinery, office space leases, equipment, and other basic necessities.
The most you can borrow with a Microloan is $50,000, and the average amount that borrowers use is about $13,000. Although the term of the loan depends on the size of the loan and what you’re using the funds for, the longest term for a Microloan is six years.
The Bank of Elk River is a certified SBA Preferred Lender and can help streamline the loan application process, fast-track approvals, and provide quick access to funding. Learn more about SBA loan options through The Bank of Elk River here.
Whether you’re expanding operations or just starting out, The Bank of Elk River works with customers to determine the right financing option to meet their needs. From checking and savings accounts to loans, we have options to fit a variety of business needs.
Our experienced bankers can guide you through the process of SBA loans, commercial loans, and other non-conventional loan programs. Explore our business services on our website, and feel free to contact us to learn more from an experienced business banker today.
Whether you’re a fully operating business looking to add a new truck to your fleet, build a new location, or just starting out, you’ll need money to turn your plans into reality. It might help to work with an accountant to calculate estimated costs for reaching the next level of development.
The Basics
Before you borrow, list your basic business expenses. Each time you expand your business, these costs are likely to increase:
- Employee salaries
- Rent
- Electricity, heating, air conditioning, and fuel
- Paper and other office supplies
- Purchasing or leasing operating equipment
- Decorating or remodeling costs
- Legal and professional fees
- Insurance
- Taxes
- Machinery and power tools
One option to increase your funds is to get a line of credit, which is a type of loan that gives you short-term or seasonal funds.
Basically, a line of credit is very similar to a credit card, with the notable exception that interest on a line of credit is lower and may be tax deductible. You borrow cash, using your business assets as collateral, and pay back the principal and interest on any outstanding balance each month.
A long-term credit loan usually lasts up to five years and is helpful if you want to have money for operating costs until your business turns a profit. Lenders typically require that you provide collateral or sign a promissory note on this type of loan and pay it back in installments.
Credit Cards
Visa®, American Express®, and Mastercard® all offer credit cards aimed specifically at small businesses. These cards offer lower interest rates than normal credit cards and often have higher credit limits. The Bank of Elk River offers multiple business credit card options with benefits from low rates to cash back to flexible rewards.
Loans
If you’re thinking about taking a loan to build your business, there are several qualifications that banks expect from you, as the owner, and your business. Before you apply for a loan, make sure that you can provide potential lenders with the following:
- Business plan
- Balance sheet and income statement
- Cash flow projections
- Profit and loss reports
- Personal financial statements for all business partners
- Credit report
- Personal income tax returns
- Information on business debts
Having a strong relationship with a specific institution is a good business practice, as that could make it easier for you to get loans when you need them. If you don’t use one particular bank, you might want to open a business banking account or secure small lines of credit before applying for a large loan.
A Little Help
Since 1993, the Small Business Administration (SBA) has extended Microloans to businesses to help finance machinery, office space leases, equipment, and other basic necessities.
The most you can borrow with a Microloan is $50,000, and the average amount that borrowers use is about $13,000. Although the term of the loan depends on the size of the loan and what you’re using the funds for, the longest term for a Microloan is six years.
The Bank of Elk River is a certified SBA Preferred Lender and can help streamline the loan application process, fast-track approvals, and provide quick access to funding. Learn more about SBA loan options through The Bank of Elk River here.
Whether you’re expanding operations or just starting out, The Bank of Elk River works with customers to determine the right financing option to meet their needs. From checking and savings accounts to loans, we have options to fit a variety of business needs.
Our experienced bankers can guide you through the process of SBA loans, commercial loans, and other non-conventional loan programs. Explore our business services on our website, and feel free to contact us to learn more from an experienced business banker today.
