Take Control of Your Credit

Posted on November 4, 2007 by Admin

Leslie Hoffman, Director of Lending, ACCION New Mexico

Ever tried to borrow money from a bank? What about applying for a credit card? Have your ever financed the purchase of a car? The banker, credit card company or car dealer probably asked about your credit history.

For some, it’s an intimidating question, but it doesn’t have to be. You can take control of your credit if you understand what it is and what it can do for you.

Credit is the ability to borrow money to pay for things. Good credit means you make loan payments on time and pay off your debts when they are due. Poor credit means you miss payments, don’t meet pay-off deadlines or have too much debt.

Credit can be useful in emergencies if you need money quickly. It can also allow you to make larger purchases when you don’t want to pay the full amount at one time. For entrepreneurs, it can be a critical element in the growth or start-up of a business.

Financial institutions verify your credit through a credit report that reflects how you have handled your debts. There are three national agencies that produce credit reports – Equifax, Experian and Transunion – and all include similar information in their reports.
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Getting a Loan Officer to Say Yes

Posted on October 28, 2007 by Admin

Kim T. Blueher, Director of Lending, WESST Corp.

Asking for money is something no one likes to do. Asking to borrow money can be just as difficult. The outcome will depend on how prepared you are.

First, research the different loan programs available throughout New Mexico. It would be a waste of time to apply for a loan that doesn’t fit the requirements of your business. Conversely, it would be a shame to miss out on a loan program that is perfect for your company because you aren’t aware of it.

Make sure you understand words you may not normally use – words like assets, liability, net worth, gross or net profit, collateral, receivables, payables, amortize and depreciate. Having a working knowledge of these terms lets the lender know that you understand the financial part of your business.

Obtain your credit report. This document is one of the most important criteria that lenders evaluate when they are considering a loan request. It is essential that you look at your own report at least once a year to make sure that the information is correct. You can also learn your credit score, which indicates how well you have paid your debts. Many lenders will not approve a loan if the credit score is too low.
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Business Financing: Your Idea Is Just the Beginning

Posted on October 21, 2007 by Admin

F. Leroy Pacheco, Executive Director, The Loan Fund

People often ask, “What do I really need to get a loan?”

They have reviewed the various bank programs, surfed the Internet, talked to friends and attended seminars. They may be drowning in information but they are still unclear about what to do next. How, exactly, does one go about getting financing, without having to sign over the rights to a house, a car, or as the joke goes – a firstborn child?

It all starts with an idea. But it’s the planning associated with turning that idea into a viable business that is the most important factor and one of the keys to whether or not a loan will be awarded.

Before you talk to a banker, a venture capitalist or an alternative lending group such as The Loan Fund, you need to do some thinking. Don’t worry about doing a full-blown business plan – yet. Ask yourself these seven questions. We will certainly ask them if you call us about a loan.

Is your idea a good one? You love it, but will anybody else? Why would someone who doesn’t know you buy your product or service?

How are you going to reach your target customers? We often see plans that include “advertising” as the sole marketing tactic. There’s a lot more to marketing than advertising.
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Business Loans: When Traditional Banks Can’t Help

Posted on October 18, 2007 by Admin

F. Leroy Pacheco, CEO, The Loan Fund

Nine years ago, while working as a housekeeper for a large Albuquerque hotel, Delia Gallegos dreamed of her own restaurant. Today she is the owner of two restaurants that provide a living wage to nine employees, and she has plans to open a third.

Delia is just one of many successful clients of The Loan Fund, a non-profit alternative lending agency that steps in when banks are unable to make a loan. The mission of The Loan Fund is to build New Mexico communities, and we pursue this mission one loan at a time.

The Loan Fund was founded in 1989 by the Council of Churches to help alleviate poverty in New Mexico. It was, and still is, a laudable goal and Continue reading →

Preparation Is the Key to Getting a Business Loan

Posted on October 14, 2007 by Admin

Paul F. Goblet, Investment Advisor, NMSBIC

Unlike securing a consumer loan for a home or car, getting a business loan can be difficult. Consumer loans have become readily available, and often a borrower can be pre-approved based on his or her credit score.

A business loan, on the other hand, demands far more documentation, takes longer to close, and is often based on both the historical success of the business and the personal financial strength of the owner.

There are many reasons for this. Valuing a business is not as simple as having an appraisal on a home because there are fewer comparisons – not many businesses are exactly like yours. Nor can the business be sold as quickly as a home or car.

The New Mexico Small Business Investment Corporation (NMSBIC) tries to make the process of obtaining a business loan easier. Through its financial partners, like ACCION New Mexico, WESST Corp. or The Loan Fund, we have provided funding for over 1,300 business loans throughout the state. While each financial partner has their own credit approval process and each requires different documentation, these partners are accustomed to working with small businesses that might otherwise have trouble securing a loan from a traditional bank.
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New Mexico Is Ready For Business

Posted on October 7, 2007 by Admin

Paul F. Goblet, Investment Advisor, NMSBIC

The Small Business Investment Corp (SBIC) was created by state legislation in 2000 to provide equity or loan capital to small businesses in New Mexico. Support for this legislation rested on the knowledge that small businesses – those with 25 or fewer employees – are the backbone of the state, sustaining the economies of local communities where they are located. Most new jobs in the state have been generated by small businesses, and small firms represent the majority of business enterprises in New Mexico.

While it may be a cliché, investing on Main Street instead of Wall Street has paid big dividends in New Mexico, where existing businesses have been strengthened and new businesses have sprouted as a result. Improvements in the economy are visible from Clovis to Farmington and many towns in between, where jobs, employees and communities have flourished.

The challenge recognized by the Governor, Lt. Governor and Legislators was attracting new capital to businesses in small communities. Delivering capital to start-up firms was a similar priority, but difficulties arose around how to do it in a timely, cost-effective manner. The SBIC was created to address these challenges and to focus on making equity investments and business loans to New Mexico small businesses.

Most banks use a type of credit scoring matrix to determine if a loan will be made. Small businesses, particularly those just starting out, often have trouble qualifying for loans based on this type of scoring. In addition, small loans of $5,000 or more – those typically needed by small firms – are not very appealing to traditional lenders.
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Investment Capital Gives New Mexico Businesses a Boost

Posted on October 1, 2007 by Admin

Lt. Governor Diane Denish

As New Mexico’s lieutenant governor, one of my highest priorities has been to support small businesses throughout the state. I’ve owned a small business and know the challenges that confront people like me – particularly in finding the money and getting well-founded advice on how to start and maintain a business. The largest chunk of the business community is businesses that have fewer than 25 workers. While major employers like state, federal and local government, the military, financial service industry and health care providers provide a large number of jobs, small businesses are the ones creating new jobs and providing stability to smaller communities around the state.

In addition to an improved business environment and tax structure, providing investment capital has been a priority of our administration. Investments in large projects like Eclipse Aviation capture the headlines, but they’re not the only ones. Statewide, money to small businesses has been increasing. Private equity capital has been flowing into New Mexico at an accelerated pace, much of it aimed at the vast pool of technology developed at the national research labs and universities.

The State Investment Council has played a leading role in attracting venture capital funds. Since 1996, it has given money to funds that agree to set up shop in the state and invest in New Mexico companies. Those investments have increased over the past few years as nearly 20 funds have helped New Mexico businesses. One of them, Mesa Capital Partners, helped Aridien, Inc., a Belen company that makes the desiccant products you find in packaging. Aridien, which had four workers when it began searching for money to grow, will likely employ 30 people by year’s end, thanks to Mesa’s investment.

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Resource Tool for Start-up and Small Businesses in New Mexico