By CCGM Executive Director Jo Schmeiser
The January Power Breakfast, hosted by the Dover Federal Credit Union, set the tone for the New Year. V.P. of Business Services, Lynne Schaefer informed attendees about the types of business loans and lines of credit available through the DFCU, as well as the 5 C’s of Credit. Lynne says there are several purposes for a loan including purchasing and refinancing of real estate or business, start-up, equipment/vehicle and working capital (or seasonal cash flow).
She says although it has been harder for businesses to get loans approved over the last few years, that it is not impossible and that the DFCU will research all options to make it possible to get a loan approved. She added that even though the economy is still suffering, businesses in this area are growing and opening and the Dover Federal Credit Union is here to help the economy any way they can.
Lynne explained the 5 C’s saying character is a very important factor. She says capacity is a major factor. Capacity is if the borrower would be able to pay back the loan. What their cash flow is, if it’s a start-up business and what are the projections and proformas. Capital is another vital part of the loan process. Lynne explained that capital is money, principal, resources, funds and investments. Collateral is the next on the list. When researching the borrower’s background and the ability to pay a loan, collateral is taken into consideration. The last of the 5 C’s is conditions. Lynne says there are many conditions that could help or hinder loan approval.
In addition to the types of loans and the 5 C’s, Lynne reviewed the business loan process, application, requests, terms and what the terms mean. She explained credit analysis, debt service coverage, spreading the numbers, EBITDA, risk analysis, origination fees, borrower, site visits and appraisals & environmental assessments. Lynne says there are many important components of a lenders decision to approve a loan: what type of business/industry, location, strength of the borrower, cash flow, loan to value and collateral.
There was so much more information provided, in much better detail and is available by calling Lynne at 678.8000 ext. 3006 or emailing firstname.lastname@example.org. If you’re interested in other services offered by the DFCU, contact Milford Branch Manager Richard Bromley at 678.8000 ext. 2802 or email@example.com. For more information about upcoming educational Power Breakfasts, the Chamber of Commerce of Greater Milford, or other chamber events call 422.3344, or email firstname.lastname@example.org.