The Business Plan with Bill Reagan: Becoming conversant with your financials

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Bill Reagan (Photo courtesy Alexandria Small Business Development Center)
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Many of us are not fiscally or numbers oriented, and some business owners struggle when it comes to managing their cash, grasping their financials and particularly making borrowing decisions. This is a perfect example why someone should contact the Alexandria Small Business Development Center for help. Financial consultations are among the free services offered by the center.

Astute business owners know that engaging a financial professional to routinely review their cash flow and financial statements makes them better managers. They recognize the importance of an annual fiscal check-up. They know that, at the first indication that they need working capital, an expansion loan or even startup funding, the most effective approach is to work through their business plan and loan request with an expert. It’s much like being coached before an interview.

Alexandria Small Business Development Center Business Analyst Jack Parker has worked with Alexandria business owners for more than 20 years to help them improve their financial literacy and better manage financial aspects of their business. In that span, he has helped more than 275 business owners and start-up entrepreneurs obtain loans or investments totaling more than $80 million.

As a retired banker, Parker understands the expectations of lenders. He knows they want loan applications to clearly show how that loan will be repaid, and they expect the applicant to provide sound financial projections supported by written assumptions. Some bankers indicate they have greater confidence in the loan requests that come after the business has worked with Parker and the SBDC. Their experience is that center-assisted applicants are typically better prepared and organized, and are therefore much better credit risks.

Thanks to the center’s strong local banking relationships, bankers often refer prospective borrowers to Parker to obtain guidance. Six Alexandria banks are financial sponsors of the center, and many of their lenders work closely with Parker to connect business owners with the appropriate services and lending programs.

Being unprepared for a loan application can have far-reaching effects. Prospective borrowers might not realize that anytime your loan application is turned down, it can affect your credit rating. Alexandria business owners have access to a free resource to work with them to fine-tune their loan or line of credit application so that it answers almost every question a loan officer will ask. That way, when they approach a lender, they will have confidence in the plan they’re presenting, and have a much greater chance of it being approved.

Whether or not a business owner needs financing, it behooves them to have a strong and confidential relationship with their bank. The center is glad to have a resource in Jack Parker to help Alexandria business owners develop such banking relationships and better manage the financials of their business.

No one should be ashamed because they are not fiscally inclined. Business owners have different skillsets, and wisdom comes from knowing when to augment your own strengths with consulting expertise. We welcome your contacting the center for such guidance.

The writer is the executive director of Alexandria’s Small Business Development Center.

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