how to finance your small business

HOW TO FINANCE YOUR

SMALL BUSINESS

P R E P A R E D B Y N A M E | T I T L E

G U I D A N T F I N A N C I A L . C O M

ALLISON ZORICHDirector of Business Development [email protected]

(425)-289-3234

© Guidant Financial 2018

At your service

LEXI INGRAFFIAFranchise Financing [email protected]

(425)-589

At your service

GUIDANT FINANCIAL

Our vision is to increase the number of people who succeed in small business.

C O M P A N Y O V E R V I E W


Founded in 2003 100+ Employees Privately Held

GUIDANT FINANCIAL

Our mission is to leverage technology and services to make more capital available to Main

Street small businesses

C O M P A N Y O V E R V I E W


16K Businesses $4B in Funding 85K US Jobs Created

INDUSTRY LEADERA F E W W A Y S W E ’ V E B E E N R E C O G N I Z E D A S A N


4 Time Winner

National Young

Entrepreneur

of the Year

2 Time Winner5 Times including

#384 in 2008

Regional SMB

of the Year

FINANCING SOLUTIONSC O M P A R I S O N O F

Funding Amount

Term

Approval Time

Setup Fees

Ongoing Fees

Payments

Time to Fund

401(k)

Rollovers

SBA

Loans

Unsecured

Financing

Portfolio

Loans

Account

balance$75K-$5M $25K-$150K

60%-80%

of balance

None 10 years Revolving Revolving

3 week

average2-4 months 3 weeks 2-3 weeks

Same day 1-2 weeks2 -3 business

days

2-3 business

days

$4995 Free* 9% of capital1-3% of loan

amount

$139 $0 $0 $0

$139Principal +

interestPrincipal +

interestInterest only

Minimum $10K,

Up to value of

Equipment

2-5 Years

48 Hours

Same Day

$250 - 500

$0

Equipment Lease

Principal +

interest

*SBA loans under $200,000 without ROBS funding may be subject to a fee.

5 C’S OF SBA FINANCINGS B A ’ S C R I T E R I S


Startup Business Existing Business

Capital 30% Equity Injection 20 – 25% Equity Injection

Credit 690+ 690+

CapacityOutside Income

Strength of personal cash reservesHistorical business cash flow

Character

Direct experience start ups.

Relatable experience for franchise concept

Credit score and criminal history

Direct experience is helpful

Credit score and criminal history

CollateralVery important; business is

purely projection based

Still important even if the business

shows strong historical cashflow

UNOFFICIAL “C”T H E S B A ’ S


• Is the brand on the SBA Registry?

• Does the brand have a Bank Credit Report?

• Which banks lend to which banks?

CONCEPT (BRAND): The Franchise System

REQUIREMENTSS B A O P E R A T I N G


SBA Calculator Professional Loan

ConsultantNetwork of

4,000+ Lenders

Guaranteed Results

SBA LOAN PACKAGERSW E A R E E X P E R T


Pre-Flight

SBA Calculator

Transactional Review

Guidant Agreement

Packaging

SBA Application

Business Plan

Financial Model

Resume

Financial Statements

Credit

Funding

Closing conditions

Close

Fund per Schedule

Loan Approval

Document Request

Final Underwriting

Secure Approval

Lender Selection

Submit to Lenders

Preferred vs. Network

PLP vs. Standard

Secure LOI’s

Select Lender

Now Up to Client 1-Week 1-6 Weeks

SBA LOANST H E D E T A I L S M A T T E R W I T H


Loan Amount Terms Interest Rate Payment

$200,000

7 years 2 ¾ over PRIME $2,950

10 years 2 ¼ over PRIME$2,180

(>25% difference)

When banks compete, you may get a better deal:

By leveraging our pre-qualification process, lending relationships & Personal Loan

Consultant you could increase your likelihood of funding by 4x.

SBA COSTST R A N S P A R E N C Y I N T H E P R O C E S S


BANK PACKAGING FEE

CONSTRUCTION MANAGEMENT FEE

ATTORNEY FEES

RESIDENTIAL APPRAISAL

BUSINESS APPRAISAL (IF APPLICABLE)

UCC FILING

OTHER (CREDIT PULL, TAX TRANSCRIPT AND ENTITY INFO)

SBA CONSULTING FEE

3-5%of loan amount

BUSINESS START-UPS (ROBS)R O L L O V E R F O R


Invest up to 100% of your existing retirement

assets into a small business without taking a

taxable distribution or getting a loan.

FORMATIVE REQUIREMENTSR O B S


C Corp [EIAP] 401(k) Fair Market Value

REQUIREMENTSR O B S O P E R A T I N G


Active

EmployeeOperating

CompanyReasonable

Compensation

Active

401(k) Plan

HOW IT WORKSR O B S S T R U C T U R E


A new business is

established as a

C Corporation.

1

That corporation creates

a new 401(k) plan that can

purchase private stock.

2

Funds from your existing retirement account

are rolled into the new 401(k) plan without

triggering a taxable distribution.

3

Funds from seller financing can be

used to start, buy or expand a

business or franchise6

5

The 401(k) plan purchases stock in

the C corp., making it cash-rich.4

The cash from the corporation can now be

used as a down payment for seller financing.

EQUITY INJECTIONR O B S A S A N


• With the new SBA SOP requiring

>10% equity injection lenders need

more options for their clients

• You can use ROBS as cash towards

your loan

• Typically clients use a portion of their

rollover leaving the remainder as post

closing liquidity

SBA 7(a)

Working Capital

Retirement Funds

C CORPORATION

• Personal liability protection

• Debts are not considered the owners

• Continues even in the event of death

• Infinite number of shareholders allowed

• Fringe benefits can be expensed

• Separate taxable entity

B E N E F I T S O F A


C CORPORATIONA N I L L U S T R A T I V E E X A M P L E O F U S I N G A


Personal S Corp / LLC Personal C Corp

Salary / Profit $90,000 $90,000 $90,000 $90,000

Taxable Income $180,000 $90,000 $90,000

Effective Tax Rate 23% 20% 21%

Taxes $41,400 $18,000 $18,850

This is for illustrative purposes only. The client must work with their own

tax professional to understand the tax implications of using a C Corp.

SETUP PRICE

Outside Legal Counsel – Paid consultation with an

attorney who represents you and your business during the

setup process.

A L L I N C L U S I V E


Full Suite of Financing – Easy access to a variety of

funding options as your business grows.

Experience – Our rollover knowledge and expertise is

reflected in our audit rate, which is the lowest in our

industry.

PLAN ADMINISTRATION

Annual IRS Filing Services - We serve as your expert on IRS regulations and

401(k) plan requirements.


Business Services - We support your business as it grows by partnering and

integrating with leaders in small business services.

Risk Management - Full audit protection and ongoing legal support ensure your

investment is protected.

L E V E R A G E O U R E X P E R I E N C E F O R

$139/month

UNSECURED LOANS$ 2 5 K - $ 1 5 0 K


• Multiple lines of credit

• No cash advances

• 0% interest for the 1st year

WHAT IS IT?

• 680 or better credit score

• Credit utilization below 50%

• Little to no derogatory remarks

THE CRITERIA

(late payments, bankruptcies, etc.)

UNSECURED LOANS$ 2 5 K - $ 1 5 0 K


• Quick approval: 2-3 business days

• Quick funding: 2-3 weeks

• No underwriting of the business

• 0% interest for one year

THE BENEFITS

• 9% fee based on total amount funded

• 0% interest for one year, then average of 12% rate after

• 1-3% minimum monthly payment of balance

COSTS

PORTFOLIO LOANS6 0 - 8 0 % O F B A L A N C E


• A securities-based revolving

line of credit

WHAT IS IT?

• $85K+ in non-retirement, publicly traded

stocks and bonds

• Must trade at a minimum of $5 per share

• Can borrow up to 80% of the portfolio value

• Must transfer to a new solely owned

brokerage account (not a sale of securities,

instead an in kind transfer)

THE CRITERIA



• Quick approval: 2-3 business days

• Quick funding: 2-3 weeks

• No underwriting of the business

• 0% interest for one year

• Waved managed fees

THE BENEFITS

• 1 – 3% of credit line paid as one-time setup fee (based

on the line amount)

• 3 – 5% interest rate

COSTS

WORKING CAPITAL LOANS$ 7 5 - $ 1 5 0 K


• Specialized SBA loan

• Working capital

• Equipment purchase

WHAT IS IT?

• Business already has the start up costs covered

• Existing or new businesses

• 680 or better credit score

• Debt-to-income ratio of 40% or less

• No recent derogatory credit marks

THE CRITERIA

(late payments, bankruptcy, etc.)


• No personal collateral requirements

• 10% down payment

• 10 year term, no pre-payment penalty

• 40 – 60 day average funding

THE BENEFITS

• 6.25 – 8.25% interest rate

• $1,500 bank packaging fee

• $500 closing costs

COSTS

WORKING CAPITAL LOANS$ 7 5 - $ 1 5 0 K



• A securities-based revolving

line of credit

WHAT IS IT?

• $85K+ in non-retirement, publicly traded

stocks and bonds

• Must trade at a minimum of $5 per share

• Can borrow up to 80% of the portfolio value

• Must transfer to a new solely owned

brokerage account (not a sale of securities,

instead an in kind transfer)

THE CRITERIA

THANK YOU

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