Cadence Bank and The Tennessee Small Business Development Center (TSBDC) have formed an alliance to provide free business loan seminars and workshops for startup and existing small businesses. TSBDC also currently serves on Cadence Bank’s local CRA Advisory Council. This year, Cadence Bank supported the TSBDC by hosting multiple workshops focused on women's success, money matters for students, and financial management and money smart for small business owners.
The Money Matters Small Business Workshop, for example, is led by Cadence Bank teammates and educates participants on the language of money, how to navigate credit and the principles to help make smart business financial decisions. During the classes, participants will learn about financing and other banking services, as well as how to build effective long-term relationships with bankers and business advisors. Cadence teammates also share the importance of evaluating financing options and ways business owners can improve their chances of getting approved for loans.
What are the main factors banks review regarding a small business loan request?
When submitting a small business loan application, potential lenders and banks are looking to see if the business loan candidate has the capacity to be considered for the new loan request.
Here are the factors taken into consideration:
- Banks examine a variety of factors, such as cash flow and business and personal credit history.
- If the business is new, the personal credit history of one or more guarantors will be weighted heavily. Lenders must consider your ability to pay and evaluate the cash position of the small business.
- Banks must ensure the applicant has a strong, solid reason for incurring debt, and applicants must be able to show how their current financial position supports it.
- Additionally, banks must consider a small business's credit character, capacity to repay the loan and if the business has the collateral on hand or if individuals who are owners of the business can provide personal guarantees in the event the business is unable to pay the loan.
What role does a business owner’s personal credit history play in their ability to secure a bank loan?
The personal credit of one or more guarantors is checked and considered when the company is being vetted for the loan. At Cadence, when a customer or potential customer applies for a small business loan for their company, typically every person who owns at least 20% of the business must be included on the loan application and provide a personal guarantee for at least a portion of the loan. This is in addition to any collateral being used to secure the loan.
Signing a personal guarantee may qualify a business for considerably better terms or a lower interest rate, potentially making it a good decision. However, if the business later defaults on the loan, anyone who signed a personal guarantee can be held responsible for the remaining balance. Signing a guarantee means that you can be held liable if the business defaults. Therefore, small business owners must understand how personal guarantees work and have business partners and managers they can trust. Additionally, a review of each guarantor’s credit history is required.
How does Cadence Bank support small business growth?
Cadence bankers provide customers with the guidance and competitive products and services to help their businesses thrive.
In addition to offering customers SBA 7(a) loans, Cadence provides business checking and business credit cards and offers payment processing services, payroll services, retirement accounts, health savings account (HSA) services, and treasury management services to increase efficiencies and fraud prevention. Business owners can also transfer money by automated clearing house (ACH) and wire.
Business credit cards are convenient and beneficial because they help business owners build a strong business credit history and keep personal and business expenses separate.
Through Cadence’s online banking and mobile app, customers can manage their money 24/7, track their account history, detect potentially fraudulent activity, get alerted to low balances and more.
Together, Cadence Bank and TSBDC can help educate individuals on what’s needed to improve their chances of securing a bank loan and fulfilling their business dreams. Cadence is proud to work with organizations like TSBDC to build stronger communities.
Learn how Cadence Bank and the Tennessee Small Business Development Center (TSBDC) have teamed up to support small business and financial growth in low-to-moderate income communities.
Cadence Bank is committed to helping people, companies and communities prosper. The company places great importance on valuing relationships and doing right by others, reflecting key aspects of their values. Its teammates seek to empower the communities the company serves by engaging with current and potential customers in a fair and responsible manner. Member FDIC and Equal Opportunity Lender.
