Latest / Chatting with The Experts with Paula Okonneh / Key Steps to Position Your Business for Successful Funding

Transcript

Key Steps to Position Your Business for Successful Funding · Chatting with The Experts with Paula Okonneh

0:03
Hello everyone and welcome to another week's episode of Chatting with the
0:08
Experts with me, Paula Okonneh, your host.
0:13
Every week I bring to you women from Africa, from the Caribbean,
0:17
or in the African diaspora, and our mission is to educate, to
0:24
empower, and inspire women globally.
0:27
I've had a few men join us and their mission, they share the same mission
0:32
as I do, which is to educate, to empower and inspire women globally.
0:40
And today will be no exception.
0:44
Our topic today is Being in Position.
0:48
Get Capital Before you Need it.
0:52
And with me to do that will be Sheree Jones, who I'll tell you
0:57
a bit about before she joins us.
0:59
So she is the CEO and founder of Legacy Team Associates.
1:05
which is the premier resource partner for small businesses and real estate investors
1:13
looking to not only achieve their goals but to create a legacy for their families.
1:20
And she says we focus on financing options, on growth strategies, on
1:28
strategic partnerships, property sourcing, and even exit strategies, no matter where
1:35
you are on the spectrum of experience.
1:39
The tagline is, let us be your trusted partners to build your legacy.
1:46
And she describes herself or her business, I should say, as
1:49
Your Legacy Building Dream Team.
1:52
Wow.
1:54
I love it.
1:55
And with that, I want to welcome Sheree Jones, the CEO and founder of Legacy Team
2:00
Associates to chat in with the experts.
2:03
Hello.
2:04
Hello.
2:05
Nice to see you, Paula.
2:07
Nice to have you here.
2:10
As you heard me say, I love the name of your, you know, of your business, Legacy
2:16
Team Associates, because we need many times, those of us from Africa, from
2:22
the Caribbean and in the Diaspora don't realize that if we are successful in
2:26
our business, we need, or we should try to leave a legacy for our descendants,
2:32
for our children, our children's children, and as far down as possible.
2:37
Absolutely.
2:39
Wow.
2:39
Absolutely.
2:41
Right.
2:42
So I know I didn't say everything on your resume.
2:44
Is there anything that I left out that you would like the audience to know?
2:49
Just essentially, you know, I've been in sales and consulting
2:53
for the past 30 years.
2:54
And I realized that when I was ready to leave corporate America that I
3:00
didn't really have a lot of options.
3:01
You know, unfortunately, I didn't have a rich uncle or rich father
3:05
to say, Hey, I need $100, 000 loan so I can start my business.
3:09
So I had to bootstrap my own business and getting everything started and
3:14
seeing the challenges that other business owners went through.
3:17
I was really passionate about making sure that I provided...
3:20
so that we can stop the business failures.
3:23
You know, I've got a lot of statistics that support that so many businesses fail
3:28
because of a lack of access to capital.
3:30
And, you know, I'm gonna share some specifics.
3:33
You know, when the opportunity presents, because it's alarming at what's happening.
3:37
And so I think that if we can take a step back and understand the process of
3:41
being in position, then we can make sure that we're able to not only have more
3:46
people want to go into business, but have more people succeed in business all
3:51
the way through the end of the spectrum where they aren't either able to, you
3:55
know, pass the business down to their family or sell the business and be able
3:59
to take those monies and be able to, you know, create that wealth for that
4:03
family and create that family legacy.
4:08
I agree 100 percent because recently I was talking with someone, I was
4:13
saying to them that, you know, accumulation of, at least money,
4:17
doesn't necessarily mean you're rich.
4:20
Because, you know, it's what you do with money is understanding that
4:23
money is a tool and when it's in your hands, you need to use that tool.
4:29
Like if you have a hammer and there's a nail and you do nothing with a hammer,
4:32
that nail is going to stay right there.
4:35
Right.
4:35
Because you haven't used the hammer.
4:36
And that's in the right way, I should say.
4:38
Right.
4:39
Same thing with money.
4:41
Absolutely.
4:42
And the only way to really create that legacy and create that wealth
4:46
and that generational wealth is by business ownership, investing in real
4:50
estate, some of these different things.
4:52
Not to say you can't do well at a nine to five, but unfortunately, you're at the
4:57
mercy of that corporation or that job.
4:59
And in the minute that they say, Oh, you know, yeah.
5:02
We're laying off or whatever the case may be.
5:05
What are you going to do?
5:06
Because so many people live above their means and they're, you know, they
5:10
say 80 percent of families in the U.
5:12
S.
5:12
are living paycheck to paycheck and so if you're not taking steps to secure
5:17
and to try to create wealth by business ownership, investing in real estate, real
5:21
estate, some of the things that are going to work for you to provide passive income.
5:26
Then you can be in big trouble.
5:27
And we know that social security is failing our seniors.
5:30
So, you know, we get up age and you're ready to retire.
5:33
If you don't put some things in place, you know, you're not going
5:36
to be ready for when the time comes.
5:38
And we know time flies by me, look at us.
5:41
We're in October already of this year and time is flying by.
5:45
So there's so many different things that, you know, I'd like to share
5:48
with our community just to make sure that we're in position to be able
5:51
to do the things that are necessary to, again, create that wealth.
5:54
Close that wealth gap.
5:55
We know that there's a huge wealth gap in this country.
5:58
And, you know, because of racial biases and some other things, it's
6:02
really hard for businesses like ours to 1 to start, but then to succeed.
6:08
I want to share some, some statistics if I can.
6:11
So there's a statistic that says 82 percent of small businesses fail due
6:15
to cash flow and 47 percent of startups fail because of lack of financing.
6:21
Okay, so that's just the overall number, but of the 20 percent of
6:26
businesses that fail in the 1st year.
6:29
80 percent of black owned businesses fail within the 1st 12 to 18 months
6:34
and only 4 percent of black owned businesses make it past the startup phase.
6:40
That's horrible.
6:42
That's horrible.
6:43
And why is that?
6:44
It's because of the overarching issue.
6:47
You know, there's racial bias and both lending and equity compared to
6:52
our white counterparts unfortunately.
6:53
35 percent of white business owners are able to get the funding that they need
6:57
while only 16 percent of black businesses are able to get that same funding.
7:02
So we need to get into better position.
7:05
We need to understand what to do.
7:07
You know, we have these great ideas of starting a business and things like
7:11
that, but we may not know what the plan will entail to ensure that we have the
7:16
funding that we need to not only start, but then also to go through each phase
7:20
as you want to grow and expand and do some of the things, you know, whether
7:24
you need new equipment you want to hire people, whatever the case may be.
7:27
Sometimes you may want to acquire a business.
7:29
You know that kind of compliments what you're currently doing.
7:32
You want to be in position to know that you have the access to capital
7:35
to be able to do whatever you need so that you can successfully start grow
7:41
and you know, expand your business.
7:43
You answer the question.
7:45
A big question that was at the tip of my tongue was.
7:48
Which was how to get our businesses in the position for funding, because as
7:53
you started, you said at the beginning, most of us don't have rich uncles, rich
7:58
aunts, you know, we don't inherit money.
8:01
Right.
8:02
But we want to be, you know, self employed.
8:04
So how do we get that funding?
8:06
How do we position ourselves in the first place to get that funding?
8:09
So one of the most important things is, one, making sure
8:12
your personal credit is intact.
8:14
You know, unfortunately, because of different things that happen in our
8:17
community, sometimes our credit does take a hit and we don't necessarily do the
8:22
things that are necessary to fix that.
8:24
So you want to have pristine personal credit because if you have pristine
8:29
personal credit, then that will give you options as it relates to startup funding.
8:33
What most people don't know is, you know, you may be excited.
8:37
You have your business idea, you have your business plan and
8:39
everything, but less than 35 percent of businesses, small businesses are
8:44
able to go to the bank that they've been banking with and secure a loan.
8:49
So they think, Oh, you know, I'll just go to my, you know, I've been with, you
8:52
know, I'm not going to say any names, but you know, I've been with this bank for,
8:55
you know, 10 years and I put all my money in there and all these different things.
8:59
And now I want to start a business.
9:01
Well.
9:01
It's not as easy as you think to get that startup money.
9:04
And so even when people say, Oh, you know, the SBA has micro loans and some of these
9:09
different things, some of the parameters that are set to be able to secure that
9:13
it's very challenging, especially if you don't have your personal credit in order.
9:18
And so I've got a lot of programs, especially a startup
9:21
program that is unsecured.
9:23
So if you've got that good credit and you've got a good credit history with, you
9:28
know, any loans or mortgages and personal credit cards, then we can leverage that
9:33
to be able to get you business cards or a personal loan to be able to get started.
9:39
And then that's just the beginning because then also you need to establish
9:43
business credit for your entity so that you're in position because a
9:48
lot of people don't realize that.
9:50
You know, the SBA will give you a loan for your business after you've
9:54
been profitable for two years.
9:56
So you've got to show two years of tax returns.
9:58
Well, they may not tell you that you need a minimum credit score
10:04
of usually 660, 640 to 660.
10:07
But then you also need to have established some business credit.
10:10
So some people.
10:12
Have done well.
10:13
They've established their business.
10:15
They've gotten good personal credit.
10:17
They don't have any business credit.
10:18
And so because of that, they're not able to secure that larger loan
10:22
that they need through the SBA.
10:24
And what I've seen a lot of...
10:25
go ahead.
10:27
Because this is...
10:28
No problem.
10:29
Yeah, because this is an international program.
10:32
I just wanted to explain to people.
10:35
I'll ask you to explain to people.
10:36
What do you mean by the S.
10:37
B.
10:37
A.?
10:38
Oh, I'm so sorry.
10:39
So that is the Small Business Administration.
10:41
So that's an entity here in the U.
10:43
S.
10:44
that usually can work with banks and they can actually secure loans and help back
10:49
the loans for small businesses because banks may see the business as a risk.
10:55
You know, especially if there's no collateral.
10:57
If there's no real estate involved like you're leasing a space
11:00
and you don't own the space.
11:01
And so the SBA will back the loans, and that really just limits the exposure to
11:07
the bank when they want us to provide a small business loan to a business owner.
11:12
The challenge is, though, if you don't know that you needed to have
11:15
established business credit and you haven't, then you're kind of stuck and
11:19
you're not able to secure that loan.
11:20
And so what I've seen a lot of times happen is one may start.
11:25
They've gotten some money or they may be bootstrapped and raise their
11:29
own money to be able to get started.
11:30
But then when they need that next infusion of capital, not having been in position,
11:36
they end up having to get the worst type of loan there is for a business, which
11:40
is what we call a Merchant Cash Advance.
11:42
This is where they look at the revenue.
11:45
That you make for your business.
11:46
They look at how much you're bringing in on a monthly basis, and then
11:50
they will advance you up to 125, 150 percent of whatever your revenue is.
11:57
The challenge is you get the lump sum, but the way that they take their
12:02
payments is either daily so Monday through Friday, they're pulling
12:07
money out of your account or weekly.
12:10
So if you're trying to establish cash flow for your business and you've
12:14
got to pay payroll, you've got to get inventory, you got all these
12:17
different expenses that are coming up.
12:20
How are you supposed to manage that and effectively establish your
12:23
cash flow when they're constantly pulling money out of your account?
12:26
So I've seen some get into these situations where that's the only type of
12:30
loan that they can get because at least they are bringing in revenue, but they
12:34
get one MCA and then because they fall behind they get another one and it gets
12:39
to the point where you either sink or swim and I've seen a lot of businesses end
12:42
up sinking just based on that situation.
12:45
Okay, so I'll stop you there again.
12:48
MCA, that's the Merchandise...
12:52
Merchant Cash Advance.
12:53
Merchant Cash Advance.
12:54
It's the equivalent of like a payday loan.
12:57
If you get a personal and you get a payday loan and it's like they're hitting you
13:00
over the head with all that interest and you got to pay so much, but it's
13:04
the only thing you can get because maybe your personal credit is challenged.
13:07
It's the same type of scenario.
13:09
Oh, my God.
13:10
So, I mean, they already set you up.
13:12
It's so the system is set up to make you fail.
13:17
Yeah.
13:17
My God.
13:18
And that's why so many businesses fail because they don't have the knowledge
13:21
that's necessary to understand the different phases that you need to
13:25
go through and to get yourself ready so that you have a plan in place.
13:29
Most people have a business plan for the business, but
13:33
they don't have a funding plan.
13:34
And so that's where we can come in and help you have a funding plan
13:38
because without a funding plan, the business plan is essentially not
13:42
going to go forth because you need the funding in order to expand and
13:46
grow and to continue your business.
13:48
Okay.
13:49
So a good point now, going back to the SBA.
13:51
The SBA, most times, at least in my experience, they really
13:55
focus on this business plan.
13:57
So now I'm hearing.
13:59
That yeah, you may get the business plan, but if you don't have a funding plan,
14:04
you're already set up again to fail.
14:06
You're set up to fail.
14:07
And a lot of times people think that they can automatically go through the
14:10
SBA, but it's not a guaranteed scenario.
14:13
So there's certain people that may be able to get SBA funding.
14:17
And then there's others that may not, because they may not know
14:20
all the nuances that are involved.
14:22
So that's where we can come into play and make sure that
14:25
you have a clear understanding.
14:27
You know, you want to have a funding plan in place from the outset.
14:31
The minute you start your business all the way through.
14:34
So that you understand what's needed.
14:36
You're making sure that you're doing the things.
14:38
I've seen some small business owners that need a loan, but they don't have
14:42
a bookkeeper or CPA, and so they don't have the documents that are necessary.
14:47
They don't have the profit and loss statement, the income statement,
14:50
the things that are necessary in order to secure the loan.
14:53
And so if you haven't done your taxes in several years, and then you need a
14:58
certain type of loan, you're not going to be able to secure that loan because
15:01
you don't have everything in place.
15:02
So from starting off your business, from the way that you set up your entity, from
15:08
your personal credit, from establishing business credit to having a funding plan.
15:13
All these things are essential to making sure that you're able to
15:16
secure the funding before you need it.
15:18
Because by the time you need it, most of the time is too late.
15:21
I've seen some folks that I've tried to help recently.
15:25
They've done some things.
15:26
They've done some things and then something may have happened.
15:29
I had one guy.
15:30
He lost the contract and last year I was able to get him a type
15:35
of loan that's called factoring.
15:37
So what they will do is if you have a government contract and you're
15:41
able to secure these contracts, you get a certain amount of monies
15:45
that is maybe payable in net.
15:47
Let's say 60.
15:48
Where they're able to advance that money so that you can it can help your cash
15:51
flow in the month that you're in and then you pay them fees on the back end.
15:55
It's definitely not a merchant cash advance, but it's a way for them to
16:00
advance the monies from the contract because they are guaranteed to get paid
16:04
through a government entity or state entity or whatever the case may be.
16:08
So it's not based on your merit.
16:10
The challenge is he didn't accept the funding.
16:14
He didn't accept the funding because he didn't think he needed it.
16:16
He was like, Oh, no, I'm okay.
16:18
You know, I just got another something, something.
16:21
I'm not going to take it.
16:22
He didn't take it.
16:23
Well, he ended up getting another type of loan that put a UCC lien on his business.
16:28
What's a UCC loan?
16:29
UCC loan is what the lenders will put against your business so that
16:34
they can tie it to any assets that your business has if you default.
16:39
So let's say you own property, you own equipment, whatever you own under the
16:43
business, if you don't pay that loan then they essentially can come after
16:47
those things to pay back the loan.
16:50
So he did not take the funding.
16:53
He ended up losing one of his biggest government contracts
16:58
and then he needed money.
16:59
And because he didn't take the money at the time, he had too many
17:03
other loans against his business.
17:06
So each loan has the UCC lien, so no one would give him funding.
17:10
And now he's stuck.
17:11
And so it's one of those situations where if you're able to be approved for
17:17
money, take it even if you don't need it.
17:20
And what I usually recommend is a line of credit, because that way you're
17:23
not being charged unless you use it.
17:26
So if you get approved for a line of credit, let's say for $100, 000 and
17:31
you pull down $10, 000, you're only paying the money on that $10, 000.
17:35
And then you're able to pay it back or do whatever you need.
17:38
And then it's a revolving line of credit, which helps you if anything comes up.
17:42
If you need marketing, if you have a certain project that you need to work
17:46
on, if you need to hire a temporary staff or special project, those types
17:50
of things, you're able to do that.
17:52
So there's so many things that you can do if you have that funding plan in
17:57
place and if you secure money before you need it so that when something does
18:02
arise, you're not scrambling and scraping and then you don't have the documents
18:06
or you don't have the credit and all these things that are necessary and you
18:09
either miss opportunities or then your business is in a really bad situation.
18:16
This is very important things you are sharing here because a
18:22
lot of small business owners.
18:24
Do not think about that.
18:26
They don't know
18:26
They do
18:27
business because they are, you know, they feel that there's a
18:29
need or they feel it is a passion and this is how they can help.
18:33
Yes
18:33
. But all these things you're putting in and you're outlining there,
18:36
they're not even aware of it.
18:38
Right.
18:38
They're not aware.
18:39
And what does it say people perish for?
18:42
A lack of...
18:43
lack of knowledge.
18:44
Lack of knowledge and lack of planning.
18:46
Because if you don't have a plan in place and something comes up, you're
18:51
stuck and you're not really able to help.
18:53
And again, in our community, we don't necessarily have that friend
18:56
that we can say, Hey, you know, I need something for my business.
18:59
Do you have 50, 000?
19:00
It's just not something that we currently have.
19:02
And so, again, we want to create generational wealth so that our
19:06
kids and our kids, kids will be in a different position and they'll be
19:10
able to create more entrepreneurship.
19:12
help each other out, be more of a resource.
19:14
But one thing that I have done over the seven years, almost
19:18
eight years that I've been doing this is securing a tight network.
19:21
So I've secured a relationship with a CDFI, which is a Community
19:25
Development Financial Institution.
19:28
They have a specific fund dedicated for minority business owners.
19:32
And so this is important.
19:34
Because again, you can't necessarily just walk into your bank at the corner
19:38
and decide that you want to get funding.
19:40
So there's a way that I can share how to be able to get funded
19:44
through that particular program.
19:46
I've got a lot of other alternative lenders that provide lines of credit
19:50
equipment, financing, basically anything that you need for your business.
19:54
So that you have the ability to secure whatever you need before you need it.
19:59
And so then as you have that plan to grow, you also have the financing to
20:03
compliment that growth and you're able to sustain and grow your business.
20:08
That is so necessary.
20:12
That is so much needed, especially as you said.
20:15
In our community.
20:17
Yes.
20:18
So, I mean, I've been taking notes as you've been talking.
20:21
I mean, you probably see me looking to the side.
20:23
CDFI, Community Development Funding Initiative?
20:27
Financial institution.
20:29
Oh my gosh.
20:30
I got it all wrong.
20:31
That's okay.
20:32
So what they do is they have a specific fund that's dedicated to minority
20:37
businesses, things that are going to impact the communities that are
20:40
typically underserved so if you're bipoc, you know, and you're part
20:45
of that community, you know Black, Indigenous and people of colour.
20:48
You want to make sure that you have access to different sources so that
20:54
you can get what you need as well.
20:56
And you're not just feeling, you know, down and out because you're
21:00
not able to go to the bank and secure the loan that you need.
21:02
But again, if you take the steps to put yourself in position, you're going
21:06
to have a lot more options than you would normally have if you didn't know.
21:10
And then all of a sudden something came up, you know, even if you want
21:13
to invest in real estate and you see a prime opportunity that you want
21:17
to take advantage of, you don't want to wait until the, the opportunities
21:20
there to say, Oh no, now how am I going to get the money to get this done?
21:24
You want to have a plan in place so that when you see the right opportunity,
21:28
you already have the funding available and you're able to secure whatever
21:31
you need to move the ball forward.
21:33
You know, all what you're saying is so true and so relevant.
21:38
So, how do we, because you know, you don't know what you don't know.
21:42
Right.
21:42
And really in our community, we really don't know a lot.
21:47
You know, we've looked at people, our understanding, our relationship and money
21:51
has been one of, Oh, I don't have it.
21:53
Or when I do have it, let me spend it.
21:54
Yes.
21:55
We're the biggest spenders out there.
21:57
That's why so many people target our communities because we don't
22:01
necessarily keep the monies in our community and we do tend to overspend.
22:06
Yes.
22:07
So how do people, I mean, I know this is what you do.
22:13
How do you spread this awareness apart from on a show like mine?
22:19
You know, do you do some speaking engagements?
22:22
I mean, people need to know this because...
22:25
People need to know and what I want to do is more speaking engagements.
22:28
So I definitely welcome the opportunity.
22:30
I appreciate the opportunity of you having me on today.
22:33
And I want to do more of these.
22:35
I want to put out webinars, things like that, so that people understand what it
22:39
means, what they need to do to again, get themselves in position so that we can
22:45
create more entrepreneurship so that we can bridge the wealth gap in this country.
22:51
Absolutely.
22:52
And, you know, you talked to me in your bio, I think I read
22:56
that strategic partnerships.
22:59
We need that.
23:00
Yes.
23:02
We need a bigger network of folks that want to, you know, not only lend to
23:09
businesses in our community, but then invest in businesses in our community.
23:12
Sometimes you need to raise capital to be able to do the things you need to do.
23:16
Maybe you want to acquire another business again that complements what
23:20
you're currently doing, but you can't necessarily go out and get an SBA
23:24
loan for that particular acquisition.
23:26
Well, wouldn't it be nice if you had a resource of investors
23:28
to say, Hey, I've got money.
23:30
As long as I can put it to work for a good cause, I'm willing to
23:33
invest in your business and not take the lion's share of equity.
23:37
You know, sometimes you go to a venture capitalist or an angel investor, and
23:42
they want so much of your business, and they want to control what happens
23:46
after they invest their money.
23:47
You want someone who's more of a private investor who understands what
23:51
you're looking to do and has a passion to help businesses in our community.
23:55
And they're able to give you the capital that you need and then also
23:58
give you the mentorship that you need in order to succeed and move forward.
24:04
Oh boy.
24:06
Okay.
24:07
So yeah, we talked about strategic partnership.
24:12
Let's talk about...
24:14
you addressed a bit about different loan types.
24:17
Yes.
24:19
Let's talk a little bit more about that because there are pros to some of
24:22
these loan types and there are cons.
24:25
Yes, absolutely.
24:27
So I'll start off with unsecured funding.
24:30
So that is the ability, whether you're a startup, as long as you've created
24:35
an LLC or some other type of business entity, you're able to secure unsecured
24:40
funding, which is funding that is not tied to any type of collateral.
24:44
You typically have to have really good credit, 680 or higher, and you also
24:49
have to have a history over the last two to three years of no derogatory marks
24:55
or blemishes on your credit report, meaning you haven't had any late payments
24:59
missed payments or anything like that, any collections, any liens, judgments,
25:04
anything like that on your credit report.
25:06
The benefit of this type of funding is you're able to secure funding, even if
25:11
you don't have a business plan, even if you just started your LLC the same day.
25:15
They're going to leverage your personal credit profile and be able to extend
25:21
the loans to you to be able to secure.
25:24
So it's a great way to get your business off the ground and get it started.
25:28
And that's whether we utilize a program that's for personal term loans and we
25:32
can normally stack them on top of each other to maximize the amount you're
25:35
able to get or business credit cards.
25:38
And you know, one thing that we do is we make sure that we focus on
25:42
the business cards that are going to help establish business credit.
25:46
So some people go to their bank.
25:49
And they say, oh, I want a business credit card.
25:51
And the bank says, oh, here, here's a credit card for $25, 000, $30,
25:54
000, whatever the case may be.
25:57
But if they're not reporting that to the business credit
26:00
bureaus, it's not helping you.
26:02
And if that card is showing on your personal credit, It's not helping
26:06
you because every time you put a charge on that card, it's pulling
26:10
down your personal credit score.
26:11
So you want something a business card that's going to one report to the
26:15
business credit bureaus, and then it's not going to show up on your personal
26:19
credit unless you default on the payments.
26:22
And then that allows you to create separation between your
26:25
personal and your business credit.
26:28
So that's the first type of loan that we normally talk about.
26:31
Because again, you don't have to worry about a minimum amount of revenue or
26:35
anything like that for your business.
26:37
So let's say you've been in business for six months and you want to buy
26:43
a truck or you need to buy a piece of equipment or something like that
26:47
for your business, there's what we call an equipment financing loan.
26:50
So that allows you to use the equipment as collateral, so it's a great way to
26:56
secure you know, a piece of equipment that you may need to start your
27:01
business or to expand your business.
27:04
And because of the asset itself, serving as the collateral.
27:09
You're able to readily get that as long as you've had the business open,
27:13
typically between 6 months in a year.
27:15
So that's a great thing for, like, if you have a restaurant, or, like I
27:19
said, if you're a trucking company, or something like that, something
27:22
that operates that uses equipment.
27:24
It's a great way to do that.
27:26
So, then the next stage could be a lot of the other loans need revenue.
27:35
So you want to be able to sustain from the beginning of time that you started your
27:42
business up to about the two year mark.
27:44
You want to be able to sustain it with those types of funding.
27:48
So that when it comes down to two years, when you've been in business
27:52
for two years, and you can show profit.
27:55
That's when you can start to go to maybe an SBA loan and be
27:59
able to secure a loan that way.
28:01
You have to have all of your documents in order.
28:03
You have to have filed taxes.
28:05
You have to have your profit and loss statements and things like that in order.
28:09
So I definitely recommend when you start off that 1st year, even
28:14
if your revenue is not $100, 000.
28:17
Let's say your revenue is $25, 000 to $50, 000.
28:20
Start to get a bookkeeper, somebody that can help you to
28:24
keep those things in order.
28:25
'Cause I tell you the worst thing ever for me was starting out and I had to
28:28
do my own books and try to go back because I didn't have a bookkeeper.
28:33
And so I would go back at the, Oh no, it's time for taxes.
28:37
And then go back and try to go back and recreate the wheel and all that.
28:40
It's a big hassle.
28:42
It's a big headache.
28:43
You want someone to do that.
28:45
A lot of small business owners do like a work with some of the
28:48
companies that will do that.
28:50
They have a system in place.
28:52
The name of the company is escaping me, but it's a small business company
28:56
owned by Intuit, and they have a system where you can go in, you can connect
29:00
your bank and your bank statements can automatically upload into the system.
29:03
And then QuickBooks,
29:04
QuickBook, I was about to say.
29:06
QuickBooks, it would come.
29:08
And then it can help you with documentation of some of those things.
29:11
So if you don't have a bookkeeper and you want to use QuickBooks or some other
29:14
type of system like that, put something in place so that you have what you need.
29:19
If you do need capital, then you're able to pull the reports together and be able
29:24
to apply for the funding that you need.
29:27
Again, when it's time to apply for that SBA loan, you need to one have your
29:31
documents in order, but then you also need to have established business credit.
29:34
So you want to start that establishing of your business credit
29:37
as early on as possible so that you have all your ducks in a row.
29:42
When it comes time to actually secure that type of financing.
29:45
So SBA is a good type of financing.
29:47
There's lines of credit.
29:49
Some of the alternative lenders that I work with can provide a line of credit.
29:53
As long as you've been in business for 30 days, they are
29:58
very specific to industry types.
30:01
So I would need to definitely do an interview with the business owner.
30:03
But if you've been in business for 30 days and your revenue can project
30:07
out to at least $200, 000 a year.
30:10
Then you can get a line of credit.
30:12
It's a lot easier to get than it is.
30:14
Like I said, to go to your bank on a corner, you can go
30:17
through this particular company.
30:19
Only thing is they're very specific with industry types.
30:22
I would definitely have to do a consultation, understand your business.
30:26
You have to actually have a lease.
30:28
It's a commercial lease.
30:29
So if you're working from home, you would not qualify for that type of loan,
30:32
but it's a great option to be able to again secure a line of credit where
30:36
you're only paying for what you use versus getting a loan that you have to
30:41
pay day one, whether you use it or not.
30:44
So some people end up using those loans, but the Community Development
30:48
Financial Institution that I told you about with the fund, they do work
30:51
in capital loans up to $100, 000.
30:54
Again, you have to have shown that you've got good revenue.
30:57
You have to have a net profit.
30:59
Or at least have done revenue the year before of at least $50, 000.
31:03
So if you've done revenue of at least $50, 000, you've got your financials,
31:09
your profit and loss statement, income statement, balance sheet, your tax
31:13
returns that you can apply for them.
31:15
The thing I like about them is that they're not so focused on credit.
31:19
They look at your overall portfolio and what you bring to the table.
31:23
If you've got established revenue, and you've got okay credit, they'll
31:28
go down to a credit score of 600.
31:30
But as long as your business has the revenue to sustain and be able to
31:34
pay the debt service on it, which means it can cover the loan payments.
31:39
Then you can secure money through them and they go up to
31:41
$100, 000 for that type of...
31:43
the line of credit can go up to $250, 000, depending on the
31:46
type of business that you have.
31:48
And then the SBA can go all the way up to $5M, depending on what type
31:52
of loan structure that you need.
31:54
So there's so many different options.
31:57
Wow.
31:57
Well, we almost run out of time, but I know the audience, the live audience
32:01
would have a lot of questions for you.
32:04
But one thing I want to just touch on for those who won't be joining
32:07
us and the audience would be you talked about an exit strategy.
32:11
Yes.
32:13
So if you've established your business, you've started a business, you've
32:17
grown the business, it's stable, and then you get to the point where you're
32:21
ready to either leave to retire, or let's say you want to leave because
32:25
you want to now do something else.
32:27
Maybe you want to start another type of business.
32:29
I have a business brokerage that can help you to actually sell your business.
32:33
So we've got a Membership program, and we've got over 306, 000 registered
32:39
buyers that are just waiting to buy really good businesses.
32:43
So, you know, some of the things that they look for are that is profitable,
32:47
you know, if you've got a business, and it's been open for several years,
32:50
and then it's time to sell it, but you're not making a profit, it's
32:53
really hard to sell your business.
32:55
Because if you're trying to buy a business, you're
32:58
essentially buying an income.
33:00
So, you want to say, okay, if I pay the money for this business, how much
33:04
income can I expect on a yearly basis?
33:06
So, for people who don't want to start from the startup phase and go through
33:10
the drudgery of getting the business up and running and going through all of the
33:15
phases, you can buy a business that's already in existence and then be able to
33:19
just you know, hit the ground running.
33:21
And so the exit strategy could be that.
33:22
It could be maybe now you want to form a partnership with another business.
33:26
You want to do a joint venture.
33:28
Maybe you have a specific skill set that your business brings to the table.
33:33
And then there's another company that has a skill set.
33:35
And maybe you want to join forces and be able to go after government
33:39
contracts, things like that, that we have a network of different people.
33:42
You know, it's really important for business owners and experience to be able
33:44
to help you to secure that and do what you need to do in order to exit whether
33:49
you want to stay on board in a different entity structure, or whether you want
33:52
to leave altogether and retire or have a succession plan where you actually pass
33:57
that business down to your family members.
34:00
Wow, there's so much to talk about, but that's why we're going to
34:03
give our audience opportunity to ask you some of those questions.
34:06
But for those of you who are not able to join us today.
34:10
Sheree, how can people find you online?
34:13
Because you've got so much to share.
34:15
I mean, I wish we had flowers.
34:16
Yes.
34:16
They can look me up online.
34:18
My website is www.yourlegacy.team T.
34:26
E.
34:26
A.
34:27
M.
34:27
So www.yourlegacy.team.
34:31
I also will share with you a link that has a QR code where if someone wants to
34:36
scan the link, then they can schedule a free 30 minute consultation with me.
34:41
And then that way I can learn about their scenario and see what
34:44
we can do to either come up with a plan for them, a funding plan.
34:47
Or whatever they want to do.
34:48
If they want to buy a business, if they want to sell a business,
34:51
whatever the case may be, you know, I'm just passionate about helping.
34:54
I mean, whether you're in a small business setting or whether you are,
34:58
you know, looking to get into real estate, investing, those types of things.
35:01
I want to be able to provide the financing and the resources to be able
35:04
to help you to create your legacy.
35:06
Wow, it's passion is written all over your face about what you do.
35:10
You really want to help.
35:12
I mean, this is not just something that you're talking about.
35:14
This is something that you feel.
35:16
Absolutely.
35:17
Yes.
35:18
Absolutely.
35:19
And I have five star reviews on my site from the people who've worked
35:22
with me because that passion, you know, I make sure that I provide excellent
35:26
communication, no matter what's going on.
35:28
And then that way, you know exactly what's happening.
35:31
1 of the things that I've heard from other folks is you forge a relationship
35:36
with a lender or someone else.
35:37
And then something happens and you don't know what's going on.
35:39
And you're trying to get in contact with I'm always communicating.
35:43
So, whether that's email, whether that's text, whether that's call,
35:46
you always know what's going on.
35:47
And I keep the lines of communication open to answer questions as things
35:51
go on and with a goal of being able to get you to the end goal of
35:56
whatever you're looking to accomplish.
35:58
Wow.
35:58
And that's what you're going to do today with our live audience.
36:01
And so to our live audience, I want to say Sheree has been phenomenal.
36:07
Hasn't she?
36:08
And those of you in the audience who would like to be a guest on
36:12
my show, please reach out to me.
36:15
On my website, which is chattingwiththeexperts.com.
36:19
I'm also on LinkedIn as Paula Okonneh, on Facebook as Paula Okonneh as well.
36:26
And I'm on Instagram at chat_experts_podcast.
36:35
This show has been...
36:37
it is continuing and continues to be one of which people learn.
36:42
I have learned so much from Sheree and for those of you who are joining
36:47
us today, please stay around so that you can hear and more from Sheree.
36:51
Some things, I mean, we just are limited with time, but there's something that
36:54
you'd be able to discuss with her.
36:56
She can answer even more because we have more time.
36:59
So more expansively and connect with her online through her website that she
37:05
has just explained that she just shared with us and all the other methods that
37:10
she said that you can connect with her.
37:12
LinkedIn, she said, and yes,
37:15
Facebook.
37:15
I'm on Instagram, I'm on all the socials.
37:18
There's Legacy Team Associates, so she should be able to find
37:20
me at Legacy Team Associates.
37:22
Yes.
37:23
Well, thank you again and please, audience don't go away because there's a lot of
37:27
questions that I know you have to ask.
37:29
And she can answer them.
37:30
And I have to ask, just that we have limited time.
37:33
I look forward to it.
37:35
Thank you.