Bankers would prefer to say yes to a loan

STRENGTHENING THE rela-
tionship between a small business
owner and his banker is one of the
best ways to avoid financial dif-
ficulties.

Most bankers would rather say
“yes”? than ‘‘no’”? to a loan ap-
plication. That’s just good
business. But the banker needs all
the information that can possibly
be provided about the business, its
financial position, future plans —
and yourself.

Most small business experts
agree that lack of financing is not
a major cause of failures, but in-
adequate financial information can
be. Money problems are usually
the symptoms of a failing business,
rather than the cause.

When applying for a loan — for
operating purposes or for capital
expend’ ures such as renovating,
refurbishing, expansion or new

equipment — the proposal should
state clearly how much money is
needed, when it will be repaid, the
source of repayment and what se-

curity is available, and the value of °

that security.

A first-time borrower should
also include a personai resume to
substantiate his ability to run the
business.

kee

Application means lots of
paperwork.

The application should be back-
ed up by as much relevant material
as is available — such as a business
plan, financial statements, impor-
tant purchase or sales orders, con-
tracts, and probably most impor-
tant of all, a cash flow projection
indicating that your business will
generate sufficient funds to service
your loans.

This seems like a lot of paper-
work, but if the information is
lacking, the loan decision will at
best be delayed, and perhaps turn-
ed down.

Once the loan has been approv-
ed, the ongoing relationship with
your banker is equally important.
Accurate and prompt assessment
of interim results by both you and
your banker goes a long way
toward ensuring a_ successful
business operation.

Lack of current financial infor-
mation and planning seems to be
one of the few common
denominators in business failures.
Businesses cannot make a prudent
decision on the basis of stale or in-
complete informatioa.

If things aren’t going well, your
branch manager wants to get the
bad news fast — and from you —
because he, too, has an investment

GST weuld offer a ‘small traders’ exemption

From page 20

free products. and have annual
sales of less than $2 million to
calculate the tax owing on their
sales on the basis of the taxable

Chambers good

From page 17

corporation that focuses on the
development of small to medium-
sized businesses that tend to be at a
more sophisticated level of devel-
opment than the Enterprise Cen-
tre’s clients.

“Our mandate is to help
businesses as a term lender and
with counselling. We're a bank
with no tellers,” said Lois Carnp-
bell, an FBDB smal! business de-
velopment officer.

Among its services, FBDB offers
equity, management counselling,
strategic planning and financial
packaging.

Working in 10-month periods,
the FBDB’s popular CASE pro-

status of their purchases.

As a transitional measure until
1993, firms with sales between $2
million and $6 million will also
have access to streamlined accoun-
ting systems.

Small businesses will be paid an
adminisiration fee of up to $600
per year to help offset compliance
costs. This measure will direct
about $600 milion to small
businesses, Ottawa says.

for entrepreneurial networking

gram matches businesses with pro-
fessionals in the same field.

“The principle is that we use
people that have the experience
and know the ropes. They can
come in with practical experience
and aid businesses — not necessar-
iby failing ones, some are expan-
ding,’’ Campbell said.

Networking, a buzz word that
makes the business world tick, is
another important aspect for small
businesses to consider.

The North and West Vancouver
Chambers of Commerce are fertile
grounds for the cultivating of con-
tacts for entrepreneurs of all ages.

Judi Ainsworth, manager of the
North Vancouver Chambers, said
80 per cent of their membership

comes from small businesses.

**Home-based business is some-
thing that’s really growing. So
Many businesses start as someone
(working) at home and become a
major economic contributor,”
Ainsworth said.

Although the Chambers of
Commerce don’t act in an advisory
capacity, they do have a business
information centre, workshops,
courses, and various committees.

The North Shore Entreprise
Centre, FBDB and the Chambers
Occupy separate niches in the
resource framework.

The first and most important
task of would-be entrepreneurs is
to identify them and learn how to
use them to their full advantage.

EXPERIENCE WHERE IT COUNTS

From time to time,

business people, com-

in your enterprise. If you wait until
the last minute, it may be too late
to do anything about the problem.
When a new bank manager ar-
rives on the scene, you should
make a point of introducing
yourself without delay. Provide the
new person with an overview of

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“Where you get a good deal
and 2 good ceal more"

your business. And if your bank
manager doesn’t come to visit your
business, you extend the invitation.
It will pay off in terms of under-
standing and mutual confidence.

(This column is provided as a
public service by the Canadisa
Banker’s Association.)

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