Blog   Tagged ‘small business owners’

UMB Insights: Being Bankable

  |  Posted by

What does a bank look for when you’re applying for a small business loan? Here are some insights from a lender’s perspective.

  • Cash flow
  • Liquidity
  • Collateral
  • Character

To learn more about small business loans and SBA loans, check out more on the blog.

Continue Reading

Mr. Karaba is a Executive Vice President for UMB Business Banking. He is responsible for Leadership of the Business Banking Business Line at UMB. He joined UMB in 2013 and has 19 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

The ABCs of SBA Loans

  |  Posted by

Small Business Loans explained

UMB SBA loans

A loan from the U.S. Small Business Administration (SBA) could be a very useful option for your company, no matter if you are just getting started or if you have been around for years.

SBA loans often allow business owners who may not normally qualify for conventional commercial loans to obtain financing. This includes those who:

  • have less available cash flow,
  • are more leveraged, or
  • have little to no history in operating their business.

However, it is important to know exactly how an SBA loan differs from other loans, what types of SBA loans are available and what to consider when deciding to apply.

How do SBA loans work?

The SBA actually does not make direct loans to small businesses. Rather, when you apply for an SBA loan, you are actually applying for a commercial loan from a bank or another partner lender, structured according to SBA requirements and backed by an SBA guarantee. (The SBA agrees to pay a certain percentage of the loan if the borrower defaults.)

SBA loan vs. a traditional loan:

  • SBA loans usually have a lower down payment requirement, but higher fees
  • collateral requirements: SBA loans might access equity on a person’s home for collateral, which most traditional loans would not do.
  • SBA loans have longer amortization periods and terms. This can lead to a lower payment for the borrower.

What Types of Loans Are Available?

  • 7(a) loans – the most common offered by the SBA and include a variety of loan programs such as SBA Express and CAPLines
  • 504 loans – used primarily for real estate and equipment purchasing

Considering an SBA Loan

Many aspiring business owners are hesitant to go through the SBA loan process. The application process and associated costs seem too daunting. We recommend visiting an SBA Small Business Development Center or SBA’s website to learn more about loan options available and qualifications. These centers can work with applicants not only on loan options, but also can provide resources for business planning.

If an SBA loan seems to be a fit, we recommend working with a banker that is experienced in SBA lending and can help expedite the application process, as well as evaluate all other loan options.

 

Continue Reading

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Karaba is a Executive Vice President for UMB Business Banking. He is responsible for Leadership of the Business Banking Business Line at UMB. He joined UMB in 2013 and has 19 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

Financial Word of the Week (Small Business Month): Collateral

  |  Posted by

FWOTW

Collateral is a company’s assets that are pledged to ensure payment of a financial obligation. Collateral can include business or personal assets such as equity in your home. Business collateral typically includes equipment, inventory, vehicles and accounts receivable. As we explained in our post about the “Five Cs of Credit” (one of which is collateral), you may be required to sign a guarantee with the promise to repay the loan if you cannot repay it with the profits from your business.

Sometimes a Small Business Administration (SBA) loan could be used if there is a collateral short fall within the organization.  An SBA loan has other requirements as well.

A company must understand that the collateral they put up for a loan could be seized if a company defaults on a loan. Also remember that most lending institutions require your collateral value to be more than the loan amount.

 

 

Continue Reading

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , , , ,

Financial Words of the Week (Small Business Month): Working Capital

  |  Posted by

FWOTW

Working capital is a financial measure of cash that is calculated as Current Assets divided by Current Liabilities. Working capital is a common measure of a company’s liquidity. Current assets are your company’s most liquid assets, such as cash and other items that could be quickly turned to cash.  Current liabilities are obligations that are due within a year.  A positive working capital usually indicates that the company is able to pay off its short-term liabilities quickly.

Current assets and current liabilities include four areas that are critical for working capital management:

  • cash
  • inventory management
  • accounts payable – Remember to negotiate discounts with vendors and suppliers for a net 10 or 30-day payment.
  • accounts receivable – With money your clients owe you, consider ways to speed up payment that will impact your working capital.
    • Communication – when do you follow up on past-due items? Could you make a 10-day courtesy call? Do you have standard collection practices based on the size of your clients?
    • Eliminate any manual processes within your organization to prevent delays.
    • Shorten payment terms, and potentially provide a discount for paying promptly.
    • Email invoices and allow for Electronic Funds Transfer (EFT) payment.

Consider these ways to positively impact on your working capital and the strength of your business.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , , , , , , , , , , ,

Financial Words of the Week (Small Business Month): SWOT Analysis

  |  Posted by

FWOTW

Now that we’ve entered Q3, it’s 2015 planning time for small business owners. What better way to plan than by returning to the method you probably learned in business school: a SWOT analysis? SWOT stands for strengths, weaknesses, opportunities and threats. This analysis will lead to better awareness of your organization and insight into areas of growth, especially heading into a new year.

Strengths and Weaknesses

This should be an internal review. What are you doing well that is separating you from your competition (talent, product, process, etc)?  Understanding your company’s weaknesses is just as important and sometimes difficult to discover. Think of objections you might get during the sales process.  Keep your strengths in mind as you review your business as you might be able to leverage them to offset a weakness in your organization.

Opportunities and Threats

Many businesses are great at evaluating internally, but are challenged to look externally. Looking beyond your direct competition is important. How could government, technology, talent allow for an opportunity for growth in your market?

SWOT

Once the analysis is complete, ask for feedback from your senior leaders.  Develop a plan that will allow you to minimize your threats and capitalize on your opportunities.  Assign owners to these projects and take your business to the next level.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , , , , , , , , ,

Financial Words of the Week (Small Business Month): Recurring Revenue

  |  Posted by

FWOTW

As we enter 2015, many business owners will be looking for ways to find to keep making money in their industry.  Recurring revenue is the segment of a company’s profits expected to return the next year. It does not include one-time payments from customers. Predictability and stability of revenue is key and is often a challenge for business owners. If you can move from a 0 percent recurring revenue model to one of 10 percent, you will dramatically increase the value of your organization.

Examples of recurring revenue are monthly service contracts and subscriptions. As a business owner, how can you overcome the challenge of having customers who are hesitant to commit to long-term arrangements, but showing them the value in these contracts? Think proactively instead of reactively when it comes to products or services you can offer. The more proactive, the more value consumers can see.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , , ,

Scarred by Great Recession, small business owners are still playing it safe

  |  Posted by

SmallBusinessOwners

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , , , , ,