Five Tips to Increase Your Firm’s Chance of Getting a Small Business Bank Loan

Courtesy of American Bankers Association

Despite what you may hear in the news, banks have the funds and want to make loans to small business owners who have the ability to survive and thrive in our challenging economy — and today’s low interest rates make this an especially good time to apply.

Before you do, Bank of American Fork and American Bankers Association advises small business owners to review the following checklist:

1. Have you developed and maintained an ongoing business relationship with your banker? Relationships count in the banking world. To effectively serve customers, bankers need to understand their goals, anticipated financial needs and current financial situation. This level of understanding can only come from a continuous dialogue between the banker and the customer.

Many times, the advice a banker gives is far more important than the product or service they offer. Your banker’s advice can be more targeted and focused on your business’s needs if they know your current financial situation and plans for the future.

2. Does your business need a loan—or an equity infusion? It’s important to understand the difference between loans and equity. Loans need to be repaid over a defined time period. Equity investments are permanent funds that serve as “shock absorbers” so businesses can weather both good times and bad.

Banks are in business to make loans. Equity funds should come from the business owners.

3. Can you clearly explain your firm’s “value proposition?” You should be able to explain why customers should do business with you and how you’ll compete effectively in your chosen target market segments.

4. Do you have a business plan that covers best, most likely, and worst case scenarios? We all know that things in life don’t always work as planned. Your banker should understand all three scenarios since you’re asking for the bank’s support through good times and bad. Developing alternative business plans shows your banker that you understand both the risks and opportunities of operating in your industry.

It’s better to understand risks upfront and develop a game plan to deal with them before applying for a loan. Since your banker deals with many small businesses, he or she may have helpful ideas to help you survive and thrive in today’s challenging economy.

5. Have you developed at least two ways to repay the loan? Bankers look for both a primary and secondary source of loan repayment. Primary sources of repayment relate to how much cash your business or investment is capable of generating. Secondary repayment sources could include pledging business or personal collateral, or a loan guarantee by the firm’s owners, suppliers or customers.

The more certainty that the banker has that the loan will be paid “as agreed,” the more likely that you will not only receive a favorable loan decision, but also the best interest rate.

Bank of American Fork offers a number of small business loan products to fit many borrowers’ needs. We have been helping small businesses for 100 years and it all started with small businesses like yours—sheep farmers were some of our first business customers

“Small business loans are the key to keep communities growing and people working,” said Richard Beard, president and CEO at Bank of American Fork. “Bank of American Fork wants to lend to Utah’s small businesses, and we’re here to help you figure it all out. We want to partner with you to analyze your capital needs and help you grow your business.”

For more information about business loans, visit Bank of American Fork here on our website.

It’s 2013 and Bank of American Fork is celebrating its centennial year—we opened our doors as People’s State Bank of American Fork in 1913 and our customers were mostly sheep farmers. Now we’re Bank of American Fork, but our customers are still community members and small businesses who have big dreams.

On Thursday, January 10, we’re kicking off our 100th year with a celebration at our American Fork branch, right in the same neighborhood we started out. We will celebrate with a welcome from Bank of American Fork President and CEO Richard Beard, treats reminiscent of each decade we’ve been in the community, live music, hot air balloons (weather permitting), a visual history presentation, a speech from Edward Leary, Commissioner of the Utah Department of Financial Institutions and a time capsule to open after the next 100 years. The festivities will be starting at 9:00 a.m. at our branch on 33 E. Main Street, American Fork, Utah, and we can’t wait to see you there.

Courtesy of PCBB’s Banc Investment Daily

If you’re looking for ideas you might want to implement to help your company next year, consider the results of a Staples survey about the top things employees want to see from their company. They include eliminating office politics, allowing telecommuting, upgrading computers or technology, getting better looking or more comfortable office furniture and providing more flexible work areas and hours. If you aren’t totally sure about the ability to deliver bonuses or salary increases given industry pressure, it might make sense to think about doing some or all of these.

What kinds of upgrades have you made to improve work environment for your associates?

Since 2013 is our centennial year, we decided to hearken back to 1913 for our holiday card this year. We had a great team—Red Rider Creative and artist Bryan Niven—create the card for us. Check out this behind the scenes video of what went into the making of the card:

For more Bank of American Fork videos, visit our YouTube channel.

Guest post by John Rees, Attorney, Callister Nebeker & McCullough

Most of us know that the words we read and photographs we see online, in books, and in other media are probably protected by copyright law. But who owns the text, images, graphics and other copyright protected works? Who may enforce the copyrights?

As mentioned in a previous post, the person who creates a work is the owner of the copyright in that work. The author of a book is the owner of the copyright in the book. The photographer of an image is the owner of that image. But there is one significant exception: when a work is created as a work made for hire.

Under the work made for hire doctrine, an employer owns the works of an employee created within the scope of his or her employment. So long as the creator is an employee and not working on a project outside of his or her normal duties and responsibilities, most likely the work created will belong to the employer. If the employee wants to retain ownership of the copyright of the work, prior to the creation of the work, the employee and employer should discuss an assignment of the copyright to the employee, and consideration should be given for the assignment. Another option is for the employee to receive a license to use the work. In this way, the employee is not prohibited from using the work he or she created.

Transfer of ownership in a work itself does not transfer the copyright. For example, purchase of a piece of original art gives the purchaser the right to own and display the artwork, but it does not convey ownership in the underlying copyright. As a result, the purchaser may not make copies of the artwork, post images of the artwork online, create derivative works or distribute copies of the artwork. Similarly, if a copyright in artwork is transferred by assignment, the assignment does not necessarily include ownership of any material objects created under the copyright. The material objects and the copyright rights are distinct and treated separately.

Sometimes authors or other creators of original works collaborate on a project, such as computer software. If the contributions of two or more creators are integrated into the overall work and are inseparable, the authors become joint authors and co-owners of the entire work, regardless of the amount of their individual contributions. One software developer may code 10 percent of the program and another may code 90 percent, but both are equal owners of the entire software program. Joint authors may use the work as if there were no other owners, even if the other owner objects to the use. One of the joint owners may, without the consent of the other owners, grant licenses to third parties to use the work. One co-owner may sue for infringement without bringing the other co-owners into the litigation. However, co-owners must account to each other for any profits earned from use of the copyrighted work.

Joint ownership is distinguished from authors making a contribution to a collective work where each individual work remains distinctive and stands alone. Collective works have two different levels of ownership. Authors may own the individual articles or elements of the collective work, and another author may own the copyright in the collection of works.

Ownership in copyrights and the material objects created under copyrights are complex and need to be carefully analyzed before proceeding to exercise rights under the copyright in a work or in the material object created under the copyright. As with most intellectual property rights, caution is the word!

John Rees is a business lawyer with the law firm of Callister Nebeker & McCullough who helps clients find solutions to their business legal needs, particularly in a complex legal and business environment. He focuses on corporate and intellectual property issues, particularly relating to licensing and doing business on the internet.

Guest post by Ken Burnett, VP/Director of Training and Business Development, Bank of American Fork

This series is written from experience and is part of Bank of American Fork’s management training program. The program embraces the philosophy that management is a skill-based job, and managers need to learn specific skills to be successful.

With the rapid pace of change, if your organization doesn’t learn and institutionalize the skill of managing change you could be in trouble. Firms that are able to manage change initiative are at the top of the Fortune 500. Conversely, teams that can’t manage change are performing at the bottom. Managing change is a learned skill. The following are a few things to consider when facing organizational change.

Before you can embark on change you need to have a compelling reason for the change. A change based on an emotional reaction to a problem will result in an emotional solution that will harm the organization. At the highest level, every business change case should take the form of a logical argument:

1. Identify the problem, inhibitor, new requirement or law that is affecting desired business performance.

2. Describe the need for change or result of not changing.

3. Determine a potential solution to solve the problem.

4. List the goal or result that can be measured in terms of cost, quality, speed, or compliance.

5. Determine if the expected value of the change exceeds the cost of not changing – the return on investment.

The art and science of the business case is to provide sufficient, but not excessive, documentation of these argument elements to facilitate an executive “go” or “no go” decision.

Now that I have your attention, I think you will be surprised at the first place you should start.

Every change is first a cultural issue. You need project teams to work on the new procedures, but if the change is a cultural mismatch, you are doomed to failure. Here is an easy predictor: Write down three to five words or phrases that describe your organization’s value proposition in the marketplace and how you get work done. Then write down how the proposed change will impact those descriptions of your organization.

For example, let’s say that you wrote down that your organization provides value by being nimble. If you try to implement a new initiative that adds processes and additional structure you have to deal with the cultural clash issue first. It is almost a defense mechanism that an organization will reject a change against its culture.

There are some critical steps to resolving a culture clash:

1. Be sure that this is something worth taking on. If you don’t want to do the leg work, stop now.

2. Validate the existing culture, while introducing the change. This is tricky. You need to show how the change initiative fits within your culture. Using the previous example: Help your associates understand that adding procedures will streamline work so that you have more resources to be nimble.

3. Give the organization time to organically accept the change through a lot of communication. The result will be a change initiative that enhances the organization’s culture, rather than detracts from it.

The next guiding concept is to focus on the people, instead of the process or training or system. You need to appeal to the heart, then to the head, even with organizational change. You have to get buy-in from the associates by communicating the business case, the “What’s in it for me?”, and then listen. After going through more than a few change initiatives, I have learned a few lessons regarding communication during change. Here are some of them:

• Communicate in different ways–e-mail, paper, phone, text, and intranet.

• Build channels–committees, inboxes, helpdesks, and lunches with management–to have two-way communication with those affected by the change.

• Allow for style differences to exist. Those who are risk takers and creative will embrace the change too quickly, and detail-oriented and risk-adverse associates will be wary of change.

• Understand the difference between a rant or blowing off steam, by someone frustrated with the change in the moment and someone who is trying to be subversive to the change by complaining about it and getting others to join their cause.

• Listen and ask for specifics and assign accountability if associates have questions or concerns.

• Stay on point and on message regarding the benefits and urgency of the change

• Don’t get emotionally hooked—focus on objective points instead of emotions.

Read more of the manager skills series: Effective coaching, Productivity through employee development, Organizational communication. Coming soon: Strategic planning, Effective discipline, Project management.

Ken Burnett is vice president/director of training and business development for Bank of American Fork. He is responsible for training nearly 300 employees on a variety of topics, including coaching and feedback for dozens of senior managers within the organization.

On Thursday, December 12, Bank of American Fork and CEObuilder will be hosting the event: What is the state of your written agreements? What you don’t know can hurt you. This topic will be presented by Damian C. Smith, attorney and partner at TechLaw Ventures. Following presentation, CEObuilder participants will be able to engage in a discussion and Smith will field questions. CEObuilder events are open to anyone and can help chief executive officers to develop the skills they need.

If you ever plan to sell your company, or take on a joint venture partner, or solicit investment in your company, you will be required to make key representations or warranties pertaining to the strength of your company’s legal position in a number of areas. Consider:

• Ownership of intellectual property

• Your rights in agreements with customers

• Strength of vendor commitments

• Employee retention

• Security interest in goods sold on credit

• Quality of forms

• Compliance with your company’s benefit plan

Smith will address some of the following questions, in addition to fielding questions from the group:

• What is the purpose of written agreements?

• Is an attorney important in this process?

• How do you prepare for due diligence?

• How do you fix a deficient written agreement process?

• What are some common mistakes?

• How do you increase good customer activity through proper written agreements?

The event will be from 8:30 a.m. to 4:30 p.m. at Bank of American Fork Riverton Branch, 2691 West 12600 South, Riverton. To RSVP, go to the event on our website, and select RSVP.

Content should not be considered legal advice from Bank of American Fork.

Didn’t get all your holiday shopping done on Black Friday? Shopped out?

Finish your shopping for everyone on your list in five minutes.

A VISA®Gift card is the perfect present for any child, spouse or friend. VISA® Gift cards allow recipients to decide how they want to spend their money, saving you the hassle of trying to find the perfect gift—for everyone.

VISA® Gift cards are available in any whole-dollar amount from $25 up to $500 when purchased online or up to $750 when purchased in a Bank of American Fork branch. They can be used to make purchases in stores, restaurants, over the phone, online or anywhere VISA® cards are accepted.

Learn more about VISA® Gift cards and applicable fees, or visit a branch or order online.

VISA® and the name Visa are federally registered Trademarks of Visa.

You’re treating a client to a nice dinner when the server announces your corporate debit card was declined. Perhaps you’re at a trade show and realize you need to pay extra in order to get your booth up and running, but your debit card is again declined. Or there’s that order you need to place today to avoid a major inventory crisis, but there’s not quite enough in the company checking account to cover the cost.

These are scenarios you never want to find yourself in. And with Bounce Protection® for Business from Bank of American Fork, you never have to. For the times when there’s not enough money in the corporate account, we have a financial safety net. Bounce Protection® can cover your transactions when your checking account has insufficient funds. That way you’ll prevent important payments from being missed.

The best part is that Bounce Protection® doesn’t cost you a penny until you use it. If you qualify, it will be automatically added to your account, although you can opt out if you wish. You can choose to have it cover only your checks, or have it also cover your ATM withdrawals and debit-card purchases that would otherwise be declined due to insufficient funds. A $25 fee will apply for each covered transaction.*

Bounce Protection® for Business is available beginning today.

Learn more about this new service at bankaf.com/businessbounce .

Bounce Protection is a registered trademark of Jack Henry & Associates, Inc.

*Pricing accurate as of Sept. 21, 2012.

The little boy was so traumatized by neglect and abuse that he spoke to his therapist from inside a cardboard box for two years. Inside, he clung to his trusted teddy bear—the only one he felt comfortable with enough to have there inside with him. This child—and thousands of others like him—has benefitted from your donations to Bank of American Fork’s Project Teddy Bear. Each holiday season, we collect new and clean, gently used stuffed animals to give to children at family support centers across Utah. Many of the children are victims of abuse, neglect, poverty or addiction. Some have been taken from their homes into state custody during the night; others have been moved from one foster home to another; yet others have experienced the violent loss of a loved one.

When these children, and perhaps all children, can hug and hold their own teddy bear, it brings comfort and a feeling of safety.

You can help. Project Teddy Bear is an opportunity for you to join with the communities in Davis, Salt Lake and Utah counties, and donate teddy bears and other stuffed animals.  All Bank of American Fork branches are accepting donations of new or clean and gently used stuffed animals through December 12.