Today’s guest on this Scale Your Small Business episode is Paul Long, a business banking leader with 24 years of experience who works with business owners across Washington State. He is partnered with Gisa Credit Union (the second largest credit union in the state), where he is their SBA lending manager. His goal is to assist small businesses in restructuring their balance sheet, purchasing equipment, or acquiring another business. Most importantly, he helps businesses stop renting and instead purchase their own commercial real estate. He does this through the government guarantee programs and the US Small Business Administration (SBA) which provides lower down payments and longer terms than conventional financing.
Paul started a week after his 16th birthday as a teller for Wells Fargo. He was the youngest kid in high school with a cool bank job. He moved on from being a teller to managing a branch at the age of 21. Around 25, he really got into business banking and that’s where his love for business banking began.
He is a lifelong banker. It’s amazing to him how many people he can help through his work. “Nobody thinks that it’s that glamorous of a job, but helping a small business means you are literally changing people’s lives,” shared Paul.
What are some common obstacles that are seen with business owners when they’re trying to secure financing?
First and foremost, Paul says they’re coming to the banker too late. He’s seen many people making offers on buildings coming to him for financing and they don’t have a financing contingency. They get themselves into a contract that they can’t get out of and don’t even know if they can get the loan or not.
You’ve got to be prepared financially and build a relationship with the banker before you need to do something large.
Another big obstacle Paul sees is too much debt. If you’re thinking of growing, get out of the debt situation that you’re in. In some cases you can do that, but in most cases it’s not gonna work.
When you start a business you want it to grow, but you always want to make sure you don’t grow too fast. Businesses can grow from zero to 5 million in a year, but you take on a ton of debt in order to do that. Companies can grow too fast. They create obstacles for themselves by doing things like buying too much equipment and then coming to the bank too late and having grown too much debt.
Paul advises that the best way businesses can prepare for financing ahead of time is by starting a relationship with a business banker. This can be even just starting with a branch manager at your bank as a gateway. You need to have a relationship where the business banker can see your finances and is able to give some coaching advice.
Also, Paul says it’s critical to know your P and L so that you know where you are driving your business and what the score is. This is critical to securing financing and growing your business and your banker will love you for it.
What does the timeline look like for securing financing? Start the conversation before you file your next tax return. There’s always a war between business bankers and accountants. Accountants want you to write everything off, but your banker needs you to show a profit. You get two pieces of advice that sometimes works, and sometimes doesn’t. There are different strategies, so it’s good to have that communication between banker and cpa starting early in the process.
Paul is a huge believer in education. His biggest piece of advice is to have a relationship with a banker before you need them and not to do things on your own. There are plenty of resources out there that can help you. There are lots of free resources out there and you get those on his website. Whether you do business with him or not, he wants to give you the secrets of the industry!
Here’s where you can learn more about Paul:
- Facebook: @PaulTLong
Website Links:
Show Notes
