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Small businesses such as Wisconsin-based EC Merrill Inc can obtain interest-free loans from the Small Business Administration to free up cash Owner Jay Merrill (right, withMikeNorris) used Success Group International’s Business Plan Template to prepare his application ARC Loan Requirements To be eligible for the loan, the Small Business Administration requires the small business to be an established business (the program is not designed for start-ups); have fi nancial state- ments demonstrating profi tability in one of the last two years; and be able to project suffi cient cash fl ow to meet current and future loan payments over a two-year period from loan approval. Eligible businesses also must demonstrate immediate fi nancial hardship; your lender will analyze and confi rm that such a hardship exists. Examples of fi nancial hardship include: • Loss or reduction of customer base; • Increase in cost of doing business; 16 interest payments on existing, qualifying debt and/or loans. Loan proceeds are provided over a six- month period, and repayment of the prin- cipal is deferred for 12 months aft er the last disbursement. Repayment can be extended for five years. With this program, borrowers can redi- rect cash fl ow frommaking loan payments to investing in their businesses. Help From A Friend But a loan is a loan, and a loan requires pa- perwork. And that’s where PSI stepped in and helped Merrill out — PSI provided a full packet with all the information he needed to pull the necessary fi nancials together to pres- ent to his bank. “The process was very simple,” Merrill time-consuming part was said. “Th e most fi nding a bank that would process the loan.” Not all banks process government loans; Merrill’s own bank didn’t, so he spent a few hours visiting other banks in the area. He was successful with the third bank he went to. “I went in and asked if [the bank] would like to be an investor inmy business,” he said. WINTER 2010 • THE SUCCESSFUL CONTRACTOR With all the data needed at Merrill’s finger- tips, courtesy of PSI’s Business Plan Tem- plate, the bank was more than happy to give him the loan. Merrill applied for the loan in late July and closed on the loan in mid-August. So what advice does Merrill have for his fellow contractors who may need an influx of cash to stay in business? “Th e key is to be proactive; don’t wait un- til you can’t pay your bills,” he said. “It’s an easier process than you think it will be.” He suggests going to smaller banks in the community because they are looking for business. “A good banker understands that he is providing a service to you,” he said. In fact, if a bank doesn’t normally process SBA loans, it can work with its nearest SBA offi ce to become an SBA lender. Another bit of advice: “Before you walk in the door, make sure you have all your ducks in a row,” he noted. You’ll look more professional with your fi nancial informa- tion presented in a clean, orderly document, rather than stray pieces of paper crammed into a folder. • Loss or reduction of working capital and/or loss or reduction of short-term credit facilities; • Inability to restructure existing debts due to credit restrictions; • Loss or reduction of employees; and • Loss or reduction of major suppliers. For more information about these loans, visit www.sba.gov/ recovery/arcloanprogram. For help in applying for these loans, contact PSI at 888/347-0938 or visit The Successful Contractor Website at www.thesuccessful contractor.com. Professional extends to your attire also. “Don’t go into a banker’s office with dirty coveralls, looking like you just came in from the job,” Merrill noted. “At least go in with a clean, pressed uniform.” Make sure you have a proven method to stay out of debt. Turning to PSI like so many other profi t-minded contractors, and the strategies they have shared to weather the storm is helping E.C. Merrill. TSC

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