There are new realities in obtaining funding. Learn how to get a loan, types of lenders, ratios that matter most and how to build financial strength by watching trends, predicting your future and getting help when you need it. Frank Coker, Corelytics CEO & Special Guest, Don Brown, Vice President, Key Bank.

1. Money Matters:
New Realities in Obtaining Funding
Presented by:
Frank Coker, MBA, CMC
CEO
CoreConnex, Inc.
www.corelytics.com
frank@corelytics.com
425-454-5006
Guest:
Don Brown
Vice President
Senior Relationship Manager
Key Bank
Gig Harbor, WA

2. Agenda
How to Get a Loan
• Loans and lenders
• SBA close-up
• The process
• Financial strength
• Dashboarding
• InfoComm resources

3. Two Types of Loans
• Long term loans
• Short term loans
• Both types are tied to the loan purpose
(borrowing cause) and repayment source

4. Types of Lenders
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Banks and Credit Unions
Individuals
Asset Based Lenders
Factors
Non-Bank & Specialty Lenders

5. SBA Background
• 7(a) Program is SBA’s primary lending program
• Long term loans
• SBA does not make the loan, they guarantee
them
• Guarantee ranges from 50% to 85%
• SBA term loans are currently highly desired by
Banks and CU’s

6. Applying for an SBA Loan
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Application Package
Executive Summary
Business Profile
Management Experience
SBA Forms – PFS and Collateral
Business Financial Statements
Do not assume the lender is familiar with your industry

7. Resources
• http://www.sba.gov
• http://www.receivablesxchange.com
• http://www.insidebanking.net/sbaconsultants.html
• Key Bank link?????

8. What Does the Lender Want?
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Mutual trust – up-front honesty
Visibility
Opportunity to help solve problems early
Profitable and thriving customers
Long-term relationship
Minimum risk – high certainty
Success stories; referrals

9. The Biggest Problems
• Surprises – with no opportunity for a fix
• Shut down on communications
• Personal banker looses borrower to the
“troubled assets” department when surprises
occur (no fun for anyone)
• Customer borrows money for the wrong
purpose (e.g. LOC for a capital investment)

10. Special Cases
High Risk Situations
• Service Company – no
long-term assets
• Extreme peaks and valleys
• Revenues on down trend
• Industry that is struggling
• Company with history of
losses
• Company that is highly
reliant on a single expert
Solutions:
• Personal guarantee from
owner
• Personal assets as
collateral
• Higher cost loans
• “Alternative Lending”
sources
• Third party investor
(provides investment and
guarantee on loans)

11. Ratios that Matter
• Quick Ratio – short term assets (excluding inventory)
divided by short term liabilities
• AR Days – AR divided by average revenue per day
• Assets to liabilities – total assets divided by total liabilities
• Annual Growth – percent that revenue increased in the
past 12 months over the prior 12 months
• Profitability – EBITDA as a percent of total revenue for the
past 12 months
• Working Capital Trend – average monthly increase or
decrease in WC
• Leverage Ratio – Liability / Equity (should be 1/1)

12. What is Financial Strength?
Ability to produce cash required to:
• Run normal business operations
• Absorb routine fluctuations
• Sustain operations in the event of a downturn
• Investment runway
• Build for the future

13. Build Financial Strength
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Net profit (retained earnings)
Equity financing
Debt financing
Sell assets
Working capital optimization
a) Reduce short-term debt
b) Improve asset performance

14. Financial Strength Metrics
Working Capital = Current Assets – Current Liabilities
Target Current Assets = 1.5 x Current Liabilities [varies by industry]
Target Minimum = (1.5 x Current Liabilities) – Current Liabilities

15. Healthy Scenarios
• Getting above or being above Target Minimum is
the goal
• Understanding “health” requires trend lines

16. Unhealthy Scenarios
• Falling below or being below Target Minimum is
fundamentally unhealthy
• Understanding “health” requires trend lines

17. Exit - Thinking Ahead
Planned
Unplanned
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Acquisition
Merger
Expansion
Investment
Health surprise
Disaster
Opportunity
Technology shift
Competition
Economic downturn
It takes time to get ready;
All scenarios benefit from a strong financial position

18. What are Your Trends
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Growth
Margins
Working Capital
LOB Performance
ROI
Asset Performance
Staff Contribution

19. Get an Advisor (Coach)
Recommended role:
• Facilitate monthly review process
• Build structure and process
• Keep focus on priority issues and opportunities
• Help solve specific problems
• Support accountability

20. AV Industry Highlights
As of September 22, 2013

21. Pro AV Sales
24 month growth trend
-2.1%
6 month growth trend
+15.8%

22. Pro AV Gross Margin
24 month growth trend
-3.9%
Sales -1.6%
6 month growth trend
+49.8%
Sales +0.9%
12 month % of revenue
30.9%

23. Pro AV Payroll
24 month growth trend
-8.3%
Sales -1.6%
6 month growth trend
+0.7%
Sales +0.9%
12 month % of revenue
26.2%

24. Monitor AV Trends
at http://www.corelytics.com/InfoComm

25. Corelytics Dashboard
• Trends
• Goals
• Comparison
• Forecasts
• Metrics
• Contribution

26. Dive Deep – Dive Quickly

27. Monthly Process
1. Evaluate progress
(plan versus actual)
2. Set direction
(adjust plan to hit goals)
3. Align team
(build understanding and
commitment)

28. InfoComm Benefit:
Free Financial Forecast
• Current Corelytics subscribers
• New Corelytics subscribers
How?
• Email: support@corelytics.com
• Subject: Financial Strength
• Text: Your contact information

29. For More Information
https://infocomm.corelytics.com

30. Thank You!
https://infocomm.corelytics.com
Contact Frank at – frank@corelytics.com
Contact Don at – donald_x_brown@keybank.com