Wyoming Business Tips for February

A monthly look at issues facing Wyoming business owners and entrepreneurs from the Wyoming Small Business Development Center (SBDC) Network, a collection of business assistance programs at the University of Wyoming.

By Jill Kline, state director, Wyoming SBDC Network

One of the many services the Wyoming SBDC Network offers is helping entrepreneurs determine their financial needs for starting or expanding their business. This often results in the business seeking a loan.

So, what leads up to that outcome, and how do you move forward? 

Borrowing money for your business is a significant decision and can be stressful. Identifying the purpose and amount of the loan is critical, but that’s not all you need to know. Other considerations include the current financial status of your business; your borrowing capacity; how the repayment plan will affect your cash flow; whether a long- or short-term loan is adequate or would a revolving business credit line work for your current needs; and the terms of the loan. 

If you’re just starting your business, you’ll want to determine the startup costs; your borrowing capacity or personal credit history; how much can or must you contribute; is collateral involved; how does repayment fit into your cash flow; and other considerations. 

This broad overview of the process might look like the following:

-- Determine the loan purpose: It may be best suited for startup expenses, equipment or inventory, expansion or an unexpected expense, such as an increase in supply costs. 

-- Prepare necessary documentation: You will need cash flow statements or projections; a balance sheet and profit and loss statements; tax returns; and a business plan.

-- Compare loan options: What type of loan best supports your purpose or need?

-- Select a lender: Will your preferred lender be your current bank, credit union or an online lender? There may be some research necessary to determine the best options.

-- Complete the lender application: Applications typically require details about the business and owner and will be supported by financial documents you’ve prepared.

-- Meet with your lender: A lender may want to review your materials with you or ask you to provide an overview or pitch your request.

-- Wait: The lender conducts a thorough review of your application and documents. A lender’s criteria for making a business loan may vary.

-- Learn of approval or denial of your application: If approved, your lender will schedule a date for closing the loan. If denied, you may want to learn why, provide additional details or seek other options.

Whether you’re an existing business or a startup, cash flow projections are a great initial step. Existing businesses can use historical financial information to develop a projection. A startup will need research into industry standards, including average sales and expenditures. 

The Wyoming SBDC Network has teamed with Wyoming’s Small Business Administration (SBA) District Office to provide free training opportunities across the state to give you the “inside scoop” on how to get your first business loan approved. If you can’t attend these sessions, Wyoming SBDC Network advisers can assist you through this process through confidential, one-on-one meetings. To register for this training opportunity or find an adviser near you, visit www.wyomingsbdc.org.

The Wyoming SBDC Network offers no-cost advising and technical assistance to help Wyoming entrepreneurs think about, launch, grow, reinvent or exit their business. In 2023, the Wyoming SBDC Network helped Wyoming entrepreneurs start 54 new businesses; support 1,857 jobs; and bring a capital impact of $3.1 million to the state. The Wyoming SBDC Network is hosted by UW with state funds from the Wyoming Business Council and funded, in part, through a cooperative agreement with the U.S. SBA.

To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu, or write Dept. 3922, 1000 E. University Ave., Laramie, WY 82071-3922.