Startup financing: A guide to getting a small business loan

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Most startups get their initial funding from friends, relatives, and close supporters, but before that money runs out, and in order to support greater growth, small business owners usually consider taking out a small business loan.

There are numerous financing options available to small business owners. The following are some of them.

Bank loans

Small businesses may stand a better chance of securing a loan if they approach a community bank in their area. Community banks focus on providing loans to local businesses and individuals. However, they do not have enough cash reserves to grant very large loans. In this case, a big bank chain is a good option.

Small Business Administration (SBA) loans

If unable to secure financing from a bank, an entrepreneur can approach the SBA for assistance.

The SBA itself does not grant loans, but it does endorse small business owners to lending institutions that offer loans guaranteed by the SBA. These loans are structured according to SBA standards. Business owners interested in this type of loan should visit the SBA office in their community for more detailed information on requirements and terms.

Other types of financing include lines of credit, short-term and long-term loans, and equipment loans.

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Small business loan requirements

Lending institutions require numerous documents. These include:

• Personal background information
• A detailed business plan that includes financial statements on profit and loss, cash flow, projected revenue, and the like
• A personal resume
• A comprehensive marketing plan
• Personal and business credit reports
• Personal and business income tax returns
• Legal documents, such as franchise agreements and articles of incorporation

Finance and business specifics aren't the only factors that lenders consider when screening loan applicants. Personal character, attitude, and demeanor also come into play.

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Steve Liefschultz is the chairman and CEO of The Remada Company. Subscribe to this blog to learn more about business financing.

Are you ready to buy a house? Considerations before taking the plunge

Overwhelming. An apt word to describe the process of searching and buying a home.

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Along a myriad of decisions to makestarting from calculating how much money you are willing to cash out to scouring the real estate market in your localitycome considerations to explore in undertaking this important milestone in your life.

In the list of concerns, financial costs should be number one since there will be spiraling fees and charges from closing a mortgage down to moving in. You have to contemplate and answer several questions before taking the plunge. First, do you have a steady income? Second, will the value of the home you are eyeing on not go down in a year or so? Third, will you be able to cover maintenance and repair costs?

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Those are just a few of them. Forbes Magazine suggests to dig deeper, like when choosing the location. Is the neighborhood the perfect place for you and your family? Are there any pending local redevelopment plans? How’s the crime rate in the community? Are there churches, schools, and malls nearby?

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Seasoned homebuyers say that it’s easy to fall in love at once with a house and fantasize living in it. However, you should not let your emotions impede your line of thought for they can cause trouble by clouding your judgments. Doing the math, making a thorough research, and comparing notes with real estate experts contribute to making wise decisions.

Steve Liefschultz is the chairman of the board of The Remada Company, a real estate firm. Learn more about the business by subscribing to this Facebook page.

Amid a multifamily rental housing boom, apartment vacancies remain low in Twin Cities

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According to the latest Apartment Trends report by Marquette Advisors, construction of multifamily rental housing units continues across the Twin Cities while apartment vacancy rates remain steady. Currently, the apartment vacancy rate across the metro was at 2.4 percent at the end of the third quarter, which is a slight decrease from the 2.5 vacancy rate that was reported for the same period last year.

Near the end of 2013, construction of new apartments and condos started after a period of inactivity. Positivity and demand were high once again and residents started to move to new buildings that have fancy amenities such as pools, rooftop gardens, bocce courts, and dog walks among others. There were 2,763 new apartments that opened that year alone.

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By the end of 2014, about 5,000 new apartments are expected to be ready for occupancy in the metro. In 2015, an additional 3,600 new unit are expected to rise. Downtown Minneapolis currently sees most of the new apartment projects, with 40 percent of new construction and 33 percent of absorption in the region since December 2012.

The rental vacancy rates were at 2.1 percent in Minneapolis and 3.1 percent in downtown Minneapolis. The latest figures show a significant drop from the vacancy rate of 5.7 percent that was recorded in the second quarter of this year.

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Banker and real estate investor, Steve Liefschultz is the chairman of the board of The Remada Company in Minnesota. For more news and updates on Minnesota real estate, visit this Facebook page.