To start a new business takes courage and financing, but there is no substitute for seeking out advice from bankers who have experience working with startups at the beginning stages of a launch. Avoiding the most common mistakes means asking questions early on, and setting the course for future success. Guessing and speculation are not the entrepreneur’s friend—a sound business plan and knowing your numbers are the decision points that banks understand. Here are a few examples that show how startups can work with banks to finance their growth and future success.
There are few bank involvements that are more rewarding than to be part of a business owner’s success story. Valley is helping entrepreneurs by taking the time to understand their business and customize a financial plan that aligns with their goals. We have seasoned lenders who bring the benefit of their past business experience, as well as an understanding of current and future challenges, to the discussion.
One of our customers in particular has grown from a one-man startup into a thriving business in a relatively short period of time. Valley was able to provide equipment financing to the company as our client grew his customer base. We did this at better rates and terms than he was able to access as a young entrepreneur. Our lines of credit provided the ability to respond quickly to competitive situations and win new customers.
Another Valley-supported business was purchased and reimagined by the next generation to enter complementary lines of business in a changing economy additional resources. The core business was ramped up by re-engineering the plant, modernizing techniques and hiring more highly skilled technical workers. We were able to assist this business by providing flexible, customized financial solutions that allowed the owners to achieve their vision. The company now provides services throughout the United States, and has invested in new technologies that show great promise for the future.
Provident Bank has been very active with both startup and spin-off businesses (expanding an existing small company under a new shell or business model) within our Small Business Administration (SBA) division. We have done so by aligning ourselves with a number of dynamic franchisors across a number of industries (food,delivery, child care, etc.), who have been involved with budding entrepreneurs within the New Jersey market.
The franchise concept acts as a quasi “starter kit” for principals (franchisees). It grants them the benefits of being their own boss along with the risks that come with owning a business, although these are not as high. With a franchise, principals have the ability to leverage an existing, successful business model—one that acts as a “guide” as they seek their recipe for success.
We have seen a number of our clients launch startup business ventures via a franchise
model, and have witnessed that entity expand into two, three or four sites of that particular business. And in this challenging economy, we have witnessed many folks who were downsized from their previous jobs or underemployed, take the plunge into entrepreneurship.
It’s an ideal fit for the entrepreneur who has the drive to own their own business, but doesn’t have the experience to do so “from scratch.”
The ultimate plan for our borrowers is to utilize the franchise and the banks’ SBA loan program to put their business in a position to “graduate” from the government credit-enhanced product of the SBA into conventional business banking financing (which Provident Bank also provides).