Retailers heard what it takes to be a good candidate for borrowing money at "The Cash Crunch" seminar held at the July market.
Paul Kreiger, who works as a consultant for the Small Business Administration at the University of Georgia, Athens, highlighted eight key factors that make a business a good risk.
"Be willing to seek advice, tend to the basics of your store, focus on your customers, be innovative, pick good people, show them your leadership, have a strong system and be ethical. If you walk in [a bank] with these eight things, you're a reasonable credit risk."
He said a store owner's willingness to seek advice from successful people and a willingness to change and adapt are just as important as his or her financial record. A store's customer service is another key element.
He also explained the importance of tracking a store's progress, which he said is more than just knowing what sales are each day. "You need to know your costs each day, the results of your advertising and what your customers expect from you. There has to be a system in place to monitor these things," Kreiger explained. Leroy Smith, a senior vice president, customer credit, in Atlanta for NationsBank, advised retailers not to be fearful or hesitant about going to a bank.
"People tend to think of us as the big bad bank, but no bank can survive without customers," he explained.
He described the factors he examines when talking with a potential borrower as the "seven C's"--character, collateral, capacity, competition, conditions, cash flow and communications. He added that he looks for businesses that have a written business plan and a well-organized financial statement.
"It doesn't have to be anything sophisticated, but how committed are you to your business if you don't even know how much money it's bringing in?"
He said one mistake many borrowers make is thinking they won't get a loan because of a bad credit reference. He suggested talking to your references before the bank does.
"Talk to your worst reference first, and go from worst to best as opposed to the opposite direction. That way you have a better view of the overall picture."

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