They don't teach you that much about finances in Medical School
This webpage is under development. It is by no means finished.
Use the info here at your own risk, please check with your own and other
sources.
Writing a Business Plan
The SBA.gov website has a section called Small Business Planner - within
that there is a link to writing a
business plan. Consider checking out that website
How does one start to apply for a small business loan?
Requirements for documents vary but most may want:
Purpose of the loan
History of the business
Financial statements for three years for existing businesses
Debts
Aging of accounts receivable and payable
Projected opening-day balance sheet (new businesses)
Lease details
Amount of investment in the business by the owner(s)
Projections of income
Expenses and cash flow
Signed personal financial statements
Personal resume(s)
If the lender is unable to approve your loan, you can ask if the lender
can consider your request under the SBA loan guaranty program.
(loaning money to you with the SBA guarantee)
SBA requires that the business getting the loan is organized for profit
and is a US company (among other requirements)
What is a SBA Loan
Offered by banks and other lending institutions to assist small
businesses
These are term loans from a bank or commercial lending institution that
the SBA guarantees as much as 80 percent of the loan principal. This
helps to reduce the lender's risk and helps the lender provide financing
that's otherwise unavailable at reasonable terms.
You do not have to be turned down by a lender to qualify for a loan
guaranteed by the SBA.
The SBA (Small Business Administration) itself does not make loans.
The SBA does guarantee loans made to small businesses by private and
other institutions
The SBA's primary and most flexible loan program is called the 7(a) Loan
Program for start-up and existing small businesses.
The 7(a) Guaranteed Loan Program can be used for short and long-term
needs of existing businesses:
equipment purchase
working capital
leasehold improvements
inventory
real estate purchase
The 7(a) loans are usually guaranteed up to $750,000. The guaranty
rate is 80 percent on loans of $100,000 or less and 75% on loans more than
$100,000.
Other SBA Guaranteed Loan programs are the CDC/504 Loan Program,
Microloan Program, Disaster Assistance Loan Program
The
CDC/504 Loan Program provides long-term, fixed-rate financing to acquire
fixed assets such as real estate or equipment for expansion or
modernization. CDC stands for Certified Development Companies.
It is delivered by CDC's which are private, non-profit corporations set up
to contribute to the economic development of their communities.
Definition of small business is one which does not have an average
net income in excess of $2.5 million after taxes (info from 2009) for
the preceding 2 years, and if it does not have a tangible net worth in
excess of $7.5 million
Characteristics of a typical CDC/504 Loan: Bank provides 50%
of the project cost, CDC finances up to 40% of the project, and the
borrower provides the remaining 10%.
There may be a create/retain job rule of thumb of one job for every
$35,000 provided by the SBA.
The current WSJ prime rate -
Effective December 16, 2008 the WSJ (Wall Street Journal) now determines the
Prime Rate by polling the 10 largest banks in the United States. When at
least 7 out of the top 10 banks have changed their Prime, the WSJ will
update its published Prime Rate.
