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It’s an exciting time for you as a prospective business owner. Central Bank can provide the financing, however, there are other things you’ll need to consider. We’ve provided some resources to help you gather the information you need.
State Government Sources of Information
The State of Missouri website, http://www.ded.mo.gov/, has an incredible amount of material available. You’ll find information about:
Business Planning
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Hiring Employees
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Business Licenses & Permits
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Marketing
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Legal Formation
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Research/Resources
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Taxes
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Publications
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You may want to review the information by the Missouri Secretary of State’s site: http://www.sos.mo.gov/
Central Bank can help with the following:
Purchase Price of an Existing Business
Whenever you are purchasing a business, the agreed upon purchase price is critical for financial success. There are many business valuation methods available, and Central Bank can share the most frequently used modules with you. The module used most often is the cash flow method. Adequate cash flow is what pays the owners salary and dividends. Another decision you’ll need to make is whether this will be an asset or stock purchase. Our staff of professional business lenders is always available to help you navigate through this process, so please call us at (573)-634-1181.
SBA Programs
If a loan request doesn’t qualify for a conventional loan, then we will see if a SBA loan will work. Central Bank has been making SBA loans since 1978 and has been in the St. Louis SBA District top 10 lenders for many years. As a Preferred Lender, we have the authority to approve SBA loans for eligible borrowers. There are a variety of SBA loans available. For example, the 7(a) guaranteed loan program for term loans and the LowDoc program, which is a simple two page application for loans up to $150,000 with only a 48 hour approval time. For SBA questions, contact Leslie Tanner at Central Bank (573)-634-1142 or visit their website: www.sba.gov.
Insurance
Central Bank Insurance Agency has been taking care of insurance needs for over 100 years. If you’d like information on business insurance coverage, please call Central Bank Insurance Agency at 573-634-1141. Business insurance includes hazard insurance on inventory, liability and worker’s compensation.
Frequently Asked Start-up Questions
Q. How much money do I need to come up with to start or purchase a business?
A. At the minimum, 10% cash or asset injection for an SBA loan with more required for a conventional loan.
Q. What does SBA guaranteed loan mean to me?
A. The SBA guarantees up to 85% of the loan amount to the bank if the borrower defaults. If the loan request is short on collateral, the bank may need the SBA guarantee to approve the loan.
Q. My inventory is worth $50,000, how much collateral value is it worth?
A. Each bank has a loan to value policy. For example, inventory may have a 10% to 50% discount value.
Q. A commercial real estate loan does not have a long-term interest rate like a home loan, why is there a difference?
A. Home loan rates are based on long-term bond rates issued by Freddie Mac, Fannie Mae and other government agencies. Almost all banks use these government programs that provide fixed rates up to thirty years. On the other hand, commercial loans do not have this established secondary market. Commercial interest rates are based on the short-term Prime Rate. The Prime interest rate is indirectly related to the discount rate stated by the Federal Reserve Board, chaired by Alan Greenspan.
Q. How long is the loan process?
A. Central Bank has committed their resources to become efficient in the SBA program. As a preferred SBA lender, loans can be approved within 48 hours. However, approval time depends on the complexity of the loan and the length of time it takes to complete the application process.
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