SALEM, Ore., May 25, 2012 /PRNewswire-USNewswire/ -- In honor of National Small Business Week (May 20-26), the Oregon Bankers Association (OBA) has issued tips to help small business acquire a loan from Oregon banks. The OBA has also developed a small business lending resource center on its website, www.oregonbankers.com/smallbiz, which provides a listing of Oregon banks and additional small business resources.
When it comes to accessing credit, Oregon businesses have the benefit of a highly competitive marketplace that includes 50 regulated, insured banks. Lending capacity is very high within the banking industry today. In 2010 alone, banks made more than 65,000 new loans to small business throughout Oregon. The industry hopes to grow that number significantly in 2012.
The following tips will help small business owners best position themselves to qualify for a bank loan before applying:
OBA's Five Tips to Maximize the Chance of Getting a Small Business Bank Loan
1) Get to know bankers at a number of financial institutions.
Before requesting a loan, find out which banks in your market make loans to businesses similar to yours. Not all banks specialize in every type of business loan. Some specialize in lending to firms in certain industries. Others lend to those in certain stages of the business life cycle (no startups, for example). Work with bankers who understand your industry.
2) Be able to articulate your company's "value proposition" to its target markets.
If you can't clearly articulate why other companies or customers should do business with your company, the chances of getting a loan are slim. Outline your sources of competitive advantage and value proposition to your target markets.
3) Think like a banker.
Understand the risks of operating in your industry. Have a plan for mitigating those risks, and share it with your banker. Bankers are going to do a risk analysis anyway, so it's important to help them. Perhaps you can provide a perspective that the banker has not thought about. It's important for the banker to know that you recognize the risks and have a plan for dealing with them.
4) Develop at least two ways to get the loan repaid.
Bankers look for both "primary" and "secondary" loan repayment sources. Smart business owners plan for contingencies and share these plans with their banker.
5) Don't ask for loans that should be funded with equity injections.
Bankers don't get paid to take equity risks; they get paid to make loans that will be repaid on time. Ask your banker how much equity a typical company in your industry needs to operate effectively.
*Federal Reserve data from financial institutions subject to the Community Reinvestment Act (CRA). Small business loan amounts are rounded to the thousands.
About The Oregon Bankers Association
Established in 1905, the Oregon Bankers Association is Oregon's only full-service trade association representing state and national commercial and savings banks chartered to do business in Oregon. More information is available at www.oregonbankers.com.
SOURCE Oregon Bankers Association