For many business owners, financing becomes a priority only when an opportunity or need is right in front of them. Maybe new equipment is needed for a particular job, or a dealer is offering attractive pricing to move inventory. Or perhaps cash flow becomes tight because a receivable you expected to collect remains on the books and has not yet been converted to cash.

This reinforces a common theme advocated by many community bankers: talk to us before you need the money. By planning ahead, your community banker has the time to evaluate your financial position and structure financing that supports your business, rather than simply solving the problem or need at hand. 

Where Does Your Business Stand?

Before seeking financing, it is best to look at your company’s financial position.  Current financial statements, including the previous three years and year to date statements, along with accounts receivable aging, accounts payable, a debt schedule and personal tax returns will be needed for review by your lender.

This information helps determine not only your business’s current financial condition, but also how much additional debt your business can support. As we have mentioned in previous articles, keeping current and accurate financial statements is important. Being organized in this area will help streamline the loan review process for both you (the borrower) and your community banker.

Looking Ahead

Good business planning means looking several years ahead. Is a new building a possibility, or are you considering expanding your current location? What about new equipment, additional employees, or a new product line? These decisions often require significant capital and are much easier to manage when you have a plan in place.

Whenever possible, it is best to move at a comfortable and strategic pace rather than out of urgency. For example, establishing an appropriate line of credit before seasonal cash flow needs arise can provide flexibility when your business needs it most. In addition, if a commercial real estate purchase is on the table, your community banker can give you a better understanding of the equity, cash flow, and documentation that may be required.

Communication

A strong relationship between you and your community banker is built over time and should not begin only when a loan application is submitted. Keeping your banker informed about significant changes in your business, both positive and negative, is important. This allows your banker to evaluate alternatives, identify potential financing structures and keep you informed about the interest rate environment before a major financial decision is made. 

Include Your Banker

Commercial lending at a community bank is about relationships. At FCBT, we take the time to understand your business and the people behind it. It is not about a single transaction. It is about building a relationship that can help your business succeed and grow.

Whether you are considering an equipment loan, a commercial real estate purchase or a line of credit, start the conversation with FCBT. We are here to understand your goals, help you plan ahead, and find financing that fits your business.

About First Community Bank and Trust
First Community Bank and Trust is a privately-owned bank. Established in 1916 First Community Bank and Trust has been serving Beecher, IL, Peotone, IL and the surrounding communities for over 110 years. Our commitment to providing the best banking products and services is matched only by our outstanding customer service. We offer traditional community banking services, including mortgage, consumer, and commercial lending, as well as state of the art electronic banking services.

Press Contact:
Steve Koehn, Senior Vice President
First Community Bank and Trust
(708) 946-2246

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