Celtic Bank Blog


Need Cash Fast? Here's the Best Financing Strategies for Boosting Your Seasonal Working Capital to Hire, Market, and Expand

It’s here: the holidays. Hotels booked at maximum capacity. Sky-high sales of peppermint and pumpkin lattes. Glittering storefront displays. And six weeks of steadily ringing cash registers. For many, this is a small business owner’s dream. But without the proper preparation, this “most wonderful time of the year” can quickly turn into the terrifying mouse nightmare from the Nutcracker . Short-staffed shifts with long lines of grumpy customers and fussy children, realizing that you’ve run out of this year’s best-seller toy before the start of December, or simply not having enough money upfront to get your inventory stocked and ready for the influx of business—without the right planning, December is a disaster. While we can’t tell you whether to stock PlayStations or Pokemon cards, or how to keep your hotel staff happily working on Christmas, or which holiday sweets your customers are going to crave after a long night of caroling—we can make sure you have the money you need to make it all happen. Working Capital Loans and You You know the adage: you need to spend money to make money. Nowhere is this more apparent than at the advent of the holidays. But what if you don’t have...

A Simple Checklist for Closing Your Business Acquisition Loan and Getting Funding Faster

Okay. You’ve applied for a loan, and got all the paperwork done. The appraisal is complete. You get the email: Congratulations—you’re approved! An offer letter is issued, letting you know that you’ve been approved for the loan. Now it’s time to close the loan, and the sale. Trust us. This is one phase you don’t want to do on your own. Make sure you have a legal consultant available to review the paperwork so that things go smoothly. The SBA has published some checklist guidelines to make sure you complete everything necessary to make the transition legally. Check it out, check the boxes, and you’ll be right on your way to closing your business acquisition loan! Before you close: Verify the adjusted purchase price. Take into consideration not only how much the business itself is selling for, but the prorated rent, utilities, and inventory at the time of sale as well. Review required documents. These documents will vary by state (check with your Secretary of State for more information), but should include a corporate resolution approving the sale, evidence the business is in good standing, and any tax releases promised by the seller. Sign the promissory note. In instances where...

Due Diligence and You—When it Comes to Business Acquisitions, it's NOT Just for Your Lender

So you’ve found a business you’d like to buy. You’ve done a basic surface check, and everything looks fine. Now, it’s time to dig deep and make sure everything looks good before you sign the papers. If your business was a used car, this would be the “I’m checking to make sure I’m not buying a lemon” part. In the SBA world, we call this process “due diligence.” Due diligence is the time and effort you and a business broker or other financial advisor take to scrutinize your purchase and determine exactly what you’re getting. It isn’t glamorous; a lot of due diligence consists of double-and-triple-checking paperwork. But it’s worth it. To start the process, you need two forms: the letter of intent , and the confidentiality agreement . The letter of intent outlines the proposed price and purchase terms, as well as the conditions of sale. The confidentiality agreement ensures that you, as the buyer, won’t use the company’s private and financial information for any purpose other than determining whether or not to buy the business. With those in hand, you’re ready to dive into the seven areas of investigative work. One: Financial Start by reviewing the past three...

Four Things SBA Lenders Wish Small Business Owners Knew to Help Them Get Approved for a Business Acquisition Loan

Planning on using an SBA loan for your business acquisition purchase? Great choice! But before you’re able to get that loan, you need to figure out how to get it approved. Let’s look at what SBA lenders need you to know to maximize your chances of getting approved and getting your funding! The importance of getting your credit in gear As with other loans, your personal credit will have a major impact in your ability to get qualified for a loan. Make sure you’ve handled debt well and are making payments frequently and on-time. Avoid multiple credit inquiries on your name, and keep your debt service ratio low. The industry you’re buying into When you know the industry, you’re more likely to know the markets, run the business efficiently, and hire the right team to work for you. Which means your business has a better chance of thriving. Generally, you should have 3-5 years managerial-level experience in your industry before buying your business. Lenders who see less than this may have concerns about your ability to run the business effectively and deny your loan application. And what if you don’t have that minimum amount of experience? You may still qualify...

How to Buy a Profitable Business: What to Look for, and When to Run (From the People Who Know!)

If you’re looking to fund your business acquisition with an SBA loan, you need to start by convincing your lender that the business will be worth the risk. It’s up to you to make sure the business you’re purchasing makes the cut. So what are SBA lenders looking for? And what are the things that send them running? Take a look: Six things SBA lenders look for in your business The SBA has published a list of items borrowers should look for when thinking about buying an existing business. While eventually you’ll want to do more due diligence on the business, these are the surface-level things to consider when vetting businesses for sale. Price. Your SBA lender wants to make sure your business matches the buying price. Sometimes, if the price seems too good to be true, it is. Proven concept. Does the business have a proven track record? For how long? Have there been any major setbacks that you are aware of? Brand. You’ll be buying an established brand. What marketing and networking has already been established, and what is this brand’s reputation? Reviews. How has this business been received in the community? This will tell you a lot...

SBA Loans: What They Are, How They Work, and Why They're Perfect for Buying Your Business

So you’re thinking about buying a business. There are a lot of different options for making that purchase. How do you know which to choose? We’re here to show you the ins and outs of one of the most accessible, affordable, and all-around best financing options for buying a business—the SBA loan. You’ll learn what it is, why it’s a great option, and what you need to do to get one. There’s a lot to cover, so let’s get started! Why SBA? There’s a million options out there for buying a business. Bank loans, short term loans, SBA loans—not to mention seller financing, and private investing. When you consider all the choices, it may seem like a buyer’s market. But is it? Some loans come with steep and costly repayment packages which ultimately may hurt, not help, the growth of your business. Even if the business you purchase is healthy and thriving, if you get it at a cost you can’t actually afford you won’t stay in business long. So you could get the money from just about anywhere. But do you really want to? We’re going to look at SBA loans, and why they leave their competitors--the traditional bank...

Tax Breaks, Equipment Deductions, and More: How to Use Trump's New Business Tax Reforms to Expand Your Small Business

Since President Trump took office almost two years ago, the media has exploded with stories, press releases, and memes about the tweeting Trump. But how have his policies—especially his tax reform policies—really impacted the growth of your small business? Nine months in, and sorting past the noise of the news, let’s take a look at what the 2018 tax reform means for different small businesses all over the country. Tax Reform (and why it’s a big deal) Before we jump into the nitty-gritty, it’s important to point out how huge these changes really are. Trump’s tax reforms are the first large tax reform initiatives since Reagan … over thirty years ago! Which means you can’t expect your business to run status quo anymore. Things you’re used to deducting may not be deductible anymore. And improvements that have seemed just too expensive may actually help you save on your yearly bill from Uncle Sam. Knowing what has changed can help you leverage these new laws to your advantage—capitalizing on the growth these changes were designed to create. And while the thought of taxes usually makes us squirm—depending on your business structure and the tax, you may actually find a few of...

The Five Stages of Equipment Financing—From Application to Approval

Depending on the financing option you choose, your timeline for getting equipment financing will vary. But generally, the process of applying and getting funding for an equipment loan is quicker and easier than the process for getting a traditional loan. We’ll go over each stage of the application process, and show how timing can change depending on your options. 1. GATHER YOUR DOCUMENTS If you decide to lease your equipment, your paperwork process will be minimal. Many equipment lenders are able to gather what they need from a one-page application. If you go with an equipment loan, your paperwork will be light, too. With an SBA loan, the paperwork process can be more involved. (Granted--your loan size is usually much bigger for these loans, so you can expect that the lenders will want to know a little more about your situation before approving the loan). Have a couple things on hand when you start your initial application, like: Profit and loss statements and balance sheets Financial projections Ownership and affiliations Business certificates and licenses Loan application history Personal and business income tax returns (3 years worth) Resume Business overview and history Bank Statements Schedule of business debt Whichever route you...

Four Business-Building Equipment Loan Categories You May Have Overlooked

Some people think “equipment loan,” and they think construction equipment, industrial machinery, or heavy-duty commercial kitchen appliances. But did you know that you can also get equipment financing for a broad range of other uses, too? Whether you need machinery, technology, transportation, a new POS system or more, equipment loans can be used to purchase a lot of different types of equipment. Here are some other ways small business owners (like you!) are using equipment financing to grow their business: UPDATE TECHNOLOGY Whether you’re looking to switch from bulky desktop systems to laptops, or just revamp your medical billing process, keeping your company’s technology current gets expensive—and fast! You can pay for it all upfront—obliterating your savings for the next year. Or you can get a generic long-term loan which, by the time it’s paid off, will be for equipment that’s now, again, out of date. Smart business owners keep technology current and preserve much-needed cash by financing their equipment instead of buying it outright. The specialized loan and leasing options keep costs affordable and the equipment current, too. STABILIZE CASH FLOW Let’s say you’re looking to purchase some new equipment. And you can actually afford the full cost of...