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July 19, 2018Jul 19, 2018

Business Financing Options 2018

Starting or expanding a business can be challenging and often impossible for those without the right financial partner looking out for you and your business. That’s why many business owners opt for traditional business loan financing through reputable, established lenders to secure the funding they need to hire additional employees, purchase new equipment and expand their operations.

No matter the source or method of your intending funding, the following options have been proven to be tried-and-true options for business owners seeking additional funding. It is essential to educate yourself on these options, which is why we’ve provided a brief breakdown of the most reliable, top seven: SBA loans, microloans, private lending, lines of credit, personal business loans, crowdfunding, and grants.

Small Business Association Loans
There are a bevy of government-backed Small Business Association (SBA) loans available to both current and prospective business owners with little, or no capital. According to SBA.gov, “When traditional business loans under reasonable terms are unavailable the SBA can help eligible small businesses obtain loans from participating SBA lenders.” SBA.gov and financial institutions that provide SBA loans will walk you through the process of what is required to qualify for the government secured loan.

Microloans
Microloans are short-term loans with relatively low-interest rates often utilized by self-employed individuals and new start-ups with minimal capital requirements. While many financial institutions and online lending sources offer microloans, the SBA-backed business loan programs also offer these loans ranging from $500-$50,000.

Private Lending
Whether from friends, family, or business acquaintances, securing funding from private sources carries more risk but may offer better terms depending on your history and relationship with these groups or individuals. Private financing is more and more common in these days of venture capitalists and private equity firms, but you’ll want to investigate the loan options carefully should an offer come forward.

Credit Cards and Lines of Credit
For most Americans, credit cards have increasingly become a security blanket for business owners in need of emergency funds or short-term financing for purchases. Depending on your credit score and history, your ability to borrow and secure lines of credit through traditional financial institutions can vary. If your credit history is poor, you may be limited to using secured credit cards, which typically carry higher fees than conventional credit cards. When comparing interest rates of credit cards to a line of credit, the line of credit will usually have a lower interest rate than a credit card which means using caution when you’re purchasing with plastic.

Personal Business Loans
Though an increasingly attractive and popular option for new or first-time business owners seeking financing, personal business loans are difficult to secure without strong personal credit and proven business income. They are a convenient option for businesses who don’t qualify for an SBA-backed loan or need additionally funding that the government secured loan standard cap of $50,000. However, for those seeking a small amount of money to purchase equipment or develop an early-stage strategy or initial hiring process, they’re an attractive option for qualified borrowers.

Crowdfunding
This is perhaps the most difficult and least-reliable form of funding available today. Despite some successful products and services launched via platforms like Indiegogo and Kickstarter, there’s no tried and true recipe for success on crowdfunding platforms. In fact, the average Kickstarter campaign only raises about $7,000 and lasts nine weeks — do these numbers sound like they can support the sustainability of your business ideas? While traditional business models don’t often correlate to the crowdfunding world, if anything, it is a good way for inspired entrepreneurs looking to test their market and see what a public response to a crazy idea might be.

Grants
There is no shortage of privately and publicly-funded small business grants throughout the US. Some people choose locally-oriented groups that provide information on small business grant funding, like Prospera Business Network located in Bozeman, Montana which also includes bridge loan financing. Others may fall into the category of statewide, regional, or national programs. If you’re a member of the U.S. military, you have additional financing options available to you through small business grants oriented at veteran-owned companies. Check with your local small business administration office or community development program to see what options are available in your area.

Whatever your company’s future plan is, it doesn’t hurt to discuss your business loan options with a dedicated, community-oriented lending partner. It’s a good idea to do some prep work before reaching out to your local bank, such as cleaning up your credit report, finalizing your business plans, looking for personal collateral options to guarantee your loan, and most importantly, be prepared to invest your time and resources into your business. To learn more about Bank of Bozeman’s business lending options or to speak with a small business lending professional, contact us to schedule an appointment or stop by the branch today.

June 29, 2017Jun 29, 2017

SUCCESS STORY, DINO DROP-IN

Dino Drop-In opened the doors to its first location in March of 2016. Just 9 weeks earlier Jessica Dehn, had discovered a business partner on a sledding hill. Already friends, the two mom's began building a drop-in that would raise the standards of drop-in care in the Gallatin Valley while initiating Jessica's larger goal of revolutionizing the way we deliver childcare in the United States.
Jessica Dehn - Our initial financing came via a loan from my partners parents which allowed us to build out our first space off of 19th in Bozeman. We set aggressive start up goals and daily checked items our miles of to-dos. There were lots of late nights and 12+ hour work days but by mid-summer we were hopping busy by 8:30 am and its only gotten better. The Bozeman community loves our enriching, screen-free environment, skilled teachers, and the convenience we provide to stay and home and working parents, alike. Children can stay for an hour or all day and parents know they are learning and having fun while they are away.
Along with our success Dino Drop-In's first year also brought challenges. After my partner moved across the state, I had a dilemma; continue the partnership with an absentee partner, sell the business, or buy her out. The decision was mutual. The ideal solution would be a buy out but with only 6 months of financials, bank financing seemed unlikely.

"I stared at the room full of children and asked myself: how can we harvest their delight and use it for the greater good?"
Enter, Clinton Gerst from the Bank of Bozeman. I was one of the founders of 1 Million Cups Bozeman, which Bank of Bozeman sponsors and Clinton attends monthly. After meetings he and I would often linger discussing possible buy out plans and how to navigate the sale. When my partner finally agreed to sell, I was elated, I had such big plans, & I was prepared to go to every bank in town if that's what it took. One day I happily announced to Clinton, its time to start shopping for a bank my partner agreed to sell me her portion! Clinton replied, "No need to shop, just stop on in." That's what I did.
I was introduced to Dan Welch. Originally from Belgrade, Dan had great insight on my business. After reviewing our short track record he seemed confident Bank of Bozeman could help. I was honestly shocked that we could put something together so quickly. It seemed like it was just a week or two and every thing was all ready. The buy out closed in late October 2016 but it was just the start.

The financing not only allowed me to buy the Bozeman location but after just two months we were looking at locations in Belgrade for expansion. We found one in the Town & Country complex off Madison and moved quickly to open in late January 2017. An expansion that has doubled my business while allowing a much needed flexible daycare option in Belgrade.

From day one Dan has been my sounding board and an alternative perspective through change and growth of the business. Whenever I have a new opportunity come my way I bring him ideas and financial projections and he gives me sound financial advice on my plans. As a person has an extreme risk tolerance, I appreciate having Dan & Clinton as trusted advisers who keep me on sound financial footing.

In the months since I have also grow to know many of the staff at Bank of Bozeman and have had nothing but great experiences. The team is a great partner in my business.
April 5, 2017Apr 5, 2017

Success Story, The Lindley House

In January 2016 we purchased a beautiful historic downtown Bozeman home, on Lindley Place, with the intent to completely renovate it and run it as a Bed & Breakfast. When we purchased the home, we used seller financing, which allowed us to begin renovating right away. This was done with the goal of being ready for guest reservations for the upcoming summer season. It also gave us time to sell our existing home that we had built in Baxter Meadows (which ended up getting an offer five days after we listed it). After the closing, we moved into the top room with our youngest daughter (who attends MSU) in what felt like a college dorm situation and immediately began demolition. Doing it this way required an enormous amount of optimism since we were counting on eventually finding the right lender to help with our final permanent financing. 

At a whirlwind pace, with long evenings/weekends around Jordan’s regular full-time job at Lexis Nexis, we worked our way through the renovation. How did people do things like this without YouTube? Our experience put us in touch with some wonderful craftsmen of various fields (wood flooring,tape/texturing over wallpapered plaster walls, trim work, staircases and tile). We learned to use tools we had never heard of and gained a few more gray hairs. Our first guests arrived at The Lindley House on June 5​th​ and that first summer we had 98.6 % occupancy seven days a week! We continued to work on completing the remaining areas of renovation while learning how to run a new business. I served breakfast in the morning, cleaned lots of bathrooms, did loads of laundry and then put on my renovation work clothes. It was a very busy, tiring, exciting time for us.

During all of this, we felt some anxiety about finding the right person to help us figure out our permanent loan. We knew we needed someone that would recognize and feel the passion we felt for how much effort we had put into this home and the changes we had made. We needed someone that would understand/recognize the Bozeman market and catch the vision for our new B&B with only six months under our belt.  

We needn’t have worried because when we were introduced to Mark Gannon at Bank of Bozeman, things just fell into place. From that first meeting at our dining room table, he made us feel like we could trust him. He asked questions, walked through every part of the home, listened to what we had done, looked at our projections/results and explained the process. He was professional, calm mannered, matter of fact and upfront about our options. No matter how many questions we asked – he always found the answers. As things required adjusting, he was willing to explore what was needed to help us continue the process. He was willing to go to bat for us. It was so reassuring to feel complete confidence in him.

The day we went into his office to sign the initial loan agreement he walked us all around the bank, introducing us to everyone. We met various people who had been part of the process, had read our B&B reviews, looked at our website and participated in approving our loan. We met Laura Benson, our commercial loan administrator, who was absolutely wonderful to work with. We also met Susan Hillyerd, our Financial Services Representative, who helped us get our business and personal accounts opened as we moved everything over from our previous bank. Everyone was friendly, shook our hands and made us feel welcome. 

This local bank experience has been completely different for us! As a new business owner, this could have been so stressful, overwhelming and much less personal. Instead we feel like we’ve been welcomed into the Bank of Bozeman family. As we continue to work at our new B&B business, we know we can count on them and have confidence that they will help guide us through any future financial decisions. We now understand, in a very personal way, the difference a local community bank can make.    
NEWER1OLDER