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A Few Keys to Accessing Capital

A Seminar By Ting Wong, VP Bus Banker Shervin Khakian, VP Manager Tom Walsh, VP Manager Eastern Bank. A Few Keys to Accessing Capital. Introduction to Eastern Bank Types of Financing How to Get Financing Q & A. Overview of the Presentation.

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A Few Keys to Accessing Capital

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  1. A Seminar By Ting Wong, VP Bus Banker Shervin Khakian, VP Manager Tom Walsh, VP Manager Eastern Bank A Few Keys to Accessing Capital

  2. Introduction to Eastern Bank Types of Financing How to Get Financing Q & A Overview of the Presentation

  3. Founded in 1818, Eastern is the largest independent, mutually owned bank in New England We now have 99 branches in Massachusetts # 1 SBA Lender in New England for past six years Local bank dealing with local businesses – We primarily do business with companies in Massachusetts and New Hampshire Local decision making -  Largest commercial bank headquartered in Boston Who is Eastern Bank

  4. As your business grows, via taking on more contracts or additional sales, how do you finance these transactions • Every business wants access to capital but needs to be smart about timing and choices • This seminar is about creating a path to access capital Growing Your Business

  5. Knowing the different types of financing available is half the battle • Type of Financing Include: • Personal Start-Up Capital • Friend and Family • Microlending • Government Lending Sources • Bank Lending • Investor Financing • Venture Capital and Angel Investors Types of Financing Available

  6. Important to understand the definition of equity and debt • Equity – Ownership interest in a firm • Any time equity financing is raised, you are giving up ownership in your firm • Debt – An amount owed to a person or organization • Key Differences between the two types of financing • Debt gets paid first in a preset amount • Equity gets all the upside if the business does well but paid last Types of Financing Definitions

  7. Microlending is a source of debt financing up to $50,000 • The loans are made by microlenders such as ACCION USA, Economic Development Corps like SEED • Generally are higher risk than conventional lending, therefore interest rates are higher • Good for not yet established businesses, home based businesses Microlending - Debt

  8. Venture Capital • Angel Investors • Crowdfunding • Friends and Family • Outside Partners Different Types of Investors

  9. Can be National Programs like SBA financing, USDA lending or Ex Im bank • Can be state programs like the MGCC, BDC Capital Recycling LF or others • Can be local programs like Salem Small Business Loan fund, Storefront Renovation Program • Generally have lower interest rates, better terms but harder to get • Normally tied to job creation goals Government Programs – Can be Debt or Equity

  10. Always debt • Banks in Mass are looking to lend • Very competitive with terms and rates • Every bank has a different set of criteria by which they judge small businesses • Develop a relationship with your banker Bank Financing - Debt

  11. There is no secret to obtaining bank financing but there is a process involved Understanding the process is key to obtaining financing 3 steps are crucial to this process How to Obtain Debt Financing

  12. Eastern Bank consider small business deal size from $10,000 up to $3,000,000 • We work with all industries, even “so-called” high risk industries like construction and restaurants • Eastern provides term loans, lines of credit and commercial real estate loans for small business • For Deals up to $100,000, if you meet certain parameters, Eastern Bank can provide loan funding and approval within 15 minutes • For Deals over $100,000, typical turnaround from start to close on non real estate deals is four weeks Typical Deal Size and Parameters

  13. Before you meet with your lender, understand what statements are needed and have them prepared Understand what your needs are before speaking with your lender Always reduce a plan to paper, whether you are an existing business or a new business Understand what you are asking for Step 1 - Preparation

  14. Financing Application – Different for Every Institution • 2-3 Years Business Tax Returns • 2-3 Years Personal Tax Returns • Profit and Loss Statement • Balance Sheet • Projections needed on all start-up, turnaround projects • Business Plan needed on all start-ups Information Needed Generally

  15. Understand when the best time to obtain financing is for your business Develop and Maintain a relationship with your Eastern Bank Business Banker When you encounter problems, be proactive not reactive Have a plan for what you want Remember the Points Below – These will Help you Avoid the Pitfalls

  16. Question and Answer Session

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