Latest / The Steve Harvey Morning Show / Entrepreneur: Easy to apply for Nationwide SBA loans for underserved minority small businesses through Arkansas Capital Corp.

Transcript

Entrepreneur: Easy to apply for Nationwide SBA loans for underserved minority small businesses through Arkansas Capital Corp. · The Steve Harvey Morning Show

• 0:05
  Speaker 1: Welcome to the show.
• 0:06
  Speaker 2: I'm Rashan McDonald, the host of money Making Conversations Masterclass,
• 0:10
  Speaker 2: where we encourage people to stop reading other people's success
• 0:13
  Speaker 2: stories and start planning their own. Listen up as I
• 0:17
  Speaker 2: interview entrepreneurs from around the country, talk to celebrities and
• 0:21
  Speaker 2: ask them how they are running their companies.
• 0:23
  Speaker 1: And speak with nod profits who are making a difference
• 0:26
  Speaker 1: in their local communities.
• 0:27
  Speaker 2: Now, sit back and listen as we unlock the secrets
• 0:30
  Speaker 2: to their success on Money Making Conversations Masterclass. Hi, I'm
• 0:35
  Speaker 2: Rashan McDonald, our host this weekly money Making Conversation Masterclass show.
• 0:39
  Speaker 2: The interviews and information that this show provides off for everyone.
• 0:43
  Speaker 2: It's time to stop reading other people's success stories and
• 0:46
  Speaker 2: start living your own. My guess is the executive vice
• 0:49
  Speaker 2: President and Director of Lending for Arkaso Capital Corporation. Alkassol
• 0:53
  Speaker 2: Capital Corporation is a private, nonprofit lending corporation dedicated to
• 0:57
  Speaker 2: empowering entrepreneurs in Arkansos and surrounding states. Please work for
• 1:02
  Speaker 2: the Money Making Conversation Masterclass. Craig Kalafati, how you doing, sir?
• 1:07
  Speaker 3: I'm doing well. How are you well?
• 1:08
  Speaker 2: First of all, I got to find out about are
• 1:10
  Speaker 2: your football man? Because football season is starting. Uh in
• 1:14
  Speaker 2: Arches state of Arkansas. That's razorback Country who.
• 1:19
  Speaker 3: Album.
• 1:22
  Speaker 1: Well, they're joined you in sec so you know in
• 1:24
  Speaker 1: the territory.
• 1:26
  Speaker 3: I'm very happy about that because now I get my
• 1:27
  Speaker 3: long horns on TV.
• 1:28
  Speaker 1: There you got, my friend. I appreciate you.
• 1:30
  Speaker 3: Now.
• 1:31
  Speaker 2: When you say surrounding areas, I'm I'm from Houston, Texas,
• 1:35
  Speaker 2: so I'm very familiar with that whole area, especially that
• 1:37
  Speaker 2: Texallcana area.
• 1:39
  Speaker 1: I've been through that many times. What do you mean
• 1:41
  Speaker 1: when you're surrounding states.
• 1:44
  Speaker 3: Well, something happened that that kind of caused us to
• 1:48
  Speaker 3: expand in the surrounding states. About six months ago, SBA
• 1:52
  Speaker 3: made available an SBOC license, which is a small business
• 1:57
  Speaker 3: Lending Company license which allows a non bank to lend
• 2:02
  Speaker 3: nationwide for the ESBA program. We received one of those,
• 2:06
  Speaker 3: one of the three that were available first time in
• 2:08
  Speaker 3: forty years they've made them available. So we were limited
• 2:12
  Speaker 3: Darkansas up to that point. We're allowed to go nationwide,
• 2:15
  Speaker 3: but my thinking is I want to be sure we're
• 2:19
  Speaker 3: doing it right, so we're going to start with a
• 2:21
  Speaker 3: slow rollout. We're doing basically, be honest with you, it's
• 2:26
  Speaker 3: not just surrounding states, it's the SEC's the that's the
• 2:29
  Speaker 3: outbo which shows because everybody knows it right right right.
• 2:33
  Speaker 3: So initially that's what we're going to start with, just
• 2:35
  Speaker 3: the surrounding areas, this area of the South, and then
• 2:39
  Speaker 3: when we feel that we've got everything in place, everything
• 2:42
  Speaker 3: that's necessary to do the job right, then we'll take
• 2:45
  Speaker 3: it nationwide.
• 2:46
  Speaker 2: Now that's rest really impressive because of the fact that
• 2:49
  Speaker 2: I had never heard of that. Why was that restriction
• 2:51
  Speaker 2: in place and you said it the first time in
• 2:53
  Speaker 2: forty years.
• 2:56
  Speaker 3: Well, the non bank lenders are not regulated. So every
• 3:01
  Speaker 3: bank is regulated by the fdi C or the OCC
• 3:05
  Speaker 3: the Office of the Control of the Currency, and so
• 3:08
  Speaker 3: you have non bank lenders that are out there that
• 3:11
  Speaker 3: really aren't regulated. We're we have to be regulated by
• 3:14
  Speaker 3: the state, but some aren't regulated by anybody. So it's
• 3:17
  Speaker 3: incumbent on SBA. If they're going to let you lend
• 3:20
  Speaker 3: across the country, they have to regulate you. They have
• 3:22
  Speaker 3: to do the auditing and everything else, and frankly they
• 3:26
  Speaker 3: just didn't have the manpower and so they beef that
• 3:30
  Speaker 3: part up of SBA. So so now we are regulated
• 3:33
  Speaker 3: not only by the state of Arkansas, but by the SBA.
• 3:38
  Speaker 2: Now speaking of Korean, he's the executive vice president director
• 3:41
  Speaker 2: of lending for Arkansas Capital Corporation. Now, I say, as
• 3:44
  Speaker 2: a private nonprofit. Now, this whole show is going to
• 3:49
  Speaker 2: be by educating me because my banking is you know,
• 3:52
  Speaker 2: Bank of America, fifth Third, Wills Fogo. Now I'm talking
• 3:57
  Speaker 2: to you, please educate me on a different.
• 4:00
  Speaker 3: Okay, well, we're not a bank, so we don't take
• 4:03
  Speaker 3: deposits or anything else. A quick background in Arkansas Capital
• 4:09
  Speaker 3: we are a non bank lender. As I said, we're
• 4:12
  Speaker 3: a nonprofit. We are and we will let me back up.
• 4:18
  Speaker 3: We were formed in nineteen fifty seven by the governor
• 4:20
  Speaker 3: of Arkansas, Governor Rockefeller, and at the time, what he
• 4:24
  Speaker 3: did was he had a barbecue and he took together
• 4:26
  Speaker 3: he got together all the business leaders in Arkansas and said, look,
• 4:29
  Speaker 3: we're sitting in a very agrarian society. We need to
• 4:32
  Speaker 3: build up industry, we need to foster entrepreneurship. You're the
• 4:37
  Speaker 3: guys that are going to help me do it. And
• 4:39
  Speaker 3: he had them all kick in some money and start
• 4:41
  Speaker 3: a company to do just that. And that that was us.
• 4:45
  Speaker 3: So since nineteen fifty seven. Our mandate has been to
• 4:49
  Speaker 3: not only foster entrepreneurship small business, but to get into
• 4:54
  Speaker 3: underserved communities, rural communities, which we have plenty of here
• 4:58
  Speaker 3: in the South, and so that's really our focus. We
• 5:02
  Speaker 3: do a number of different things other than just small
• 5:05
  Speaker 3: business lending. We also have what's called an EB five Hub,
• 5:09
  Speaker 3: which is a program through a Department of Treasury and
• 5:13
  Speaker 3: Homeland Security that lends money to approved projects that create
• 5:16
  Speaker 3: American jobs via immigrants that come to this country. So
• 5:23
  Speaker 3: you were immigrating safe from China or India and you
• 5:25
  Speaker 3: had to spare nine hundred thousand dollars lying around, you
• 5:28
  Speaker 3: can invest it in this program and get your Green
• 5:31
  Speaker 3: card right away, but also create American jobs at the
• 5:35
  Speaker 3: same time. We do that. We do also do New
• 5:39
  Speaker 3: Market Tax Credits, which is another program through Department of
• 5:42
  Speaker 3: Treasury which fosters larger developments, typically over seventy nine million dollars,
• 5:48
  Speaker 3: and we do those across the South. And then our
• 5:51
  Speaker 3: educational arm we put on a contest called the Governor's Cup,
• 5:56
  Speaker 3: which is a contest for college students college team from
• 6:00
  Speaker 3: different universities, very much like Shark Tank, kind of an
• 6:04
  Speaker 3: elevator pitch contest where they win up to twenty thirty
• 6:08
  Speaker 3: thousand dollars to take their plans forward. Well, we've been
• 6:13
  Speaker 3: doing that for I think twenty one years, so the
• 6:16
  Speaker 3: small while lending is our primary focus. It's not the
• 6:19
  Speaker 3: only thing we do here, but yeah, it was. It
• 6:24
  Speaker 3: was a big boost for us to get that get
• 6:26
  Speaker 3: the SBLC license. It was a huge compliment.
• 6:30
  Speaker 2: That allows me to talk to you because you know,
• 6:32
  Speaker 2: my show is nationwide.
• 6:34
  Speaker 1: Yeah, and that's one of.
• 6:35
  Speaker 2: The reasons I was excited about it because of the
• 6:37
  Speaker 2: fact that when you start talking about underserved communities, that's
• 6:40
  Speaker 2: my audience. I'm not saying my audience is that feeled
• 6:44
  Speaker 2: with entrepreneurs. Sixty percent African American, twenty white. Fifty five
• 6:50
  Speaker 2: thousand dollars is the media income from our audience as
• 6:54
  Speaker 2: seventy percent mail. You know, so when I when I
• 6:57
  Speaker 2: look at the breakdowns, four percent mail and the great things.
• 7:03
  Speaker 2: At the start of the conversation, we was talking about
• 7:04
  Speaker 2: the Arkansas Capital Corporation. He was talking about it was
• 7:08
  Speaker 2: established for entrepreneurs and rural communities and underserved communities. Listening
• 7:15
  Speaker 2: to my audience, a lot of them in big cities.
• 7:17
  Speaker 2: So I think that this qualifies rural communities.
• 7:20
  Speaker 3: But not the underserved necessarily rights.
• 7:23
  Speaker 1: That's why I'm going, what is what qualifies as the underserved?
• 7:28
  Speaker 3: The communities of color obviously, and you know Rurle fits
• 7:32
  Speaker 3: into that. I would say, when we're talking about underserved communities,
• 7:36
  Speaker 3: we're talking about community of color, awesome, primarily Hispanic and
• 7:40
  Speaker 3: Black communities.
• 7:41
  Speaker 2: Awesome, awesome, And so again, you know, when I do
• 7:45
  Speaker 2: the interviews, Craig as always, can you tell everybody the
• 7:49
  Speaker 2: website that they can go to who wants to see
• 7:53
  Speaker 2: the applications if they want to fill out the application
• 7:55
  Speaker 2: and the process again one more time.
• 7:58
  Speaker 3: Yeah, it's arcapital dot com. Pretty easy to remember. And
• 8:02
  Speaker 3: you'll go on there and you'll see.
• 8:04
  Speaker 1: That's pretty easy.
• 8:05
  Speaker 2: Aarcapital dot com, A capital dot com.
• 8:08
  Speaker 1: I love it is a R C A P I
• 8:13
  Speaker 1: T O L T A L.
• 8:14
  Speaker 2: T A l dot com dot com. And then do
• 8:18
  Speaker 2: you is it a registration button that says loans or what?
• 8:21
  Speaker 1: Do you go?
• 8:21
  Speaker 3: It? Just it says apply here, apply here, apply here. Great,
• 8:26
  Speaker 3: and then you do that and then uh, there's also
• 8:28
  Speaker 3: contact information if you need to call us your questions.
• 8:31
  Speaker 3: Remember we're also watching you. Uh, you know, as the
• 8:34
  Speaker 3: application is being done, and if all of a sudden
• 8:37
  Speaker 3: you disappear, we're probably gonna call you and say, do
• 8:40
  Speaker 3: you need help or do you need I love that,
• 8:43
  Speaker 3: I love that.
• 8:44
  Speaker 4: Please don't go anywhere. We'll be right back with more
• 8:47
  Speaker 4: money Making Conversations Masterclass. Welcome back to the Money Making
• 8:58
  Speaker 4: Conversations Masterclass, host by Rashaan McDonald. Money Making Conversations Masterclass
• 9:03
  Speaker 4: continues online at Moneymakingconversations dot com and follow money Making
• 9:08
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• 9:12
  Speaker 2: The mentorship that you was talking about, you're not there
• 9:15
  Speaker 2: just to take applications.
• 9:16
  Speaker 1: You're trying to assist them.
• 9:18
  Speaker 2: And like you said, this is honest conversation, Greig, I
• 9:21
  Speaker 2: commend you on it because so many people in this
• 9:23
  Speaker 2: business can be frustrated and need to hear the truth.
• 9:26
  Speaker 1: It's not time right now.
• 9:28
  Speaker 2: You know, get that business plan together, see it out
• 9:32
  Speaker 2: a lot better, make sure you understand your profit more
• 9:35
  Speaker 2: and your costs on this particular product, all these things,
• 9:37
  Speaker 2: because I'm telling you, I get a lot of businesses
• 9:40
  Speaker 2: that start, you know, they're doing all right, but they're struggling.
• 9:43
  Speaker 1: But they're struggling to the.
• 9:44
  Speaker 2: Point that they cannot qualify for a business loan a
• 9:48
  Speaker 2: line of credit, and then so they stuck.
• 9:50
  Speaker 1: They kind of like stuck, and so.
• 9:52
  Speaker 2: Trying to provide opportunities for them.
• 9:57
  Speaker 1: Then they peoplework on look good, will not look good.
• 10:00
  Speaker 3: Right, And also through through that application process is also
• 10:04
  Speaker 3: where you find out exactly how much money do you
• 10:07
  Speaker 3: really need? Because one of the worst things we could
• 10:10
  Speaker 3: do is underfund somebody. That's why you see most of
• 10:13
  Speaker 3: these businesses go out of Everybody wonders this business was
• 10:16
  Speaker 3: around for six months and their doors closed. What happened.
• 10:20
  Speaker 3: It's because they thought they were going to be full
• 10:22
  Speaker 3: on day one. Yes, and that doesn't happen. And you've
• 10:26
  Speaker 3: got to have some cushion in there, and you've got
• 10:28
  Speaker 3: to build that in up front or you're not going
• 10:30
  Speaker 3: to make it. And and under capitalization is far and
• 10:33
  Speaker 3: away the biggest reason for failure.
• 10:35
  Speaker 2: I want to be if somebody was listening to my
• 10:37
  Speaker 2: show Creed and they contacted you, what is the procedure
• 10:42
  Speaker 2: of doing a lending relationship with Arkansas Capital Corporation.
• 10:48
  Speaker 3: Well, it's kind of interesting. One thing that we brought
• 10:51
  Speaker 3: online in the last year is an online application, and
• 10:55
  Speaker 3: it's it's not what a lot of people are used
• 10:57
  Speaker 3: to seeing when they go on a bank site or
• 10:59
  Speaker 3: some other lender site, is kind of an inquiry form. Hey,
• 11:02
  Speaker 3: this is what I'm looking for. Give me a call
• 11:06
  Speaker 3: that's not ours. Ours is a full blown application. It's
• 11:09
  Speaker 3: it's the complete application. They can fill it out at home.
• 11:12
  Speaker 3: I mean, let's face it, the people that we're talking
• 11:14
  Speaker 3: to and talking about here are people that are working
• 11:17
  Speaker 3: all day for the most part, they got jobs, they
• 11:20
  Speaker 3: got businesses, so they you know, they can come in
• 11:23
  Speaker 3: this thing two in the morning. They can fill out
• 11:24
  Speaker 3: their application. Once they submit that, it takes them to
• 11:28
  Speaker 3: another page which shows them all the documents that they
• 11:31
  Speaker 3: need to upload. So it's a pretty seamless, pretty easy
• 11:35
  Speaker 3: process to get into. We are notified the moment they
• 11:38
  Speaker 3: open the application. We get emails it says, hey, so
• 11:42
  Speaker 3: and so open the application so we can watch it
• 11:44
  Speaker 3: in case they have problems. But once they submit it,
• 11:47
  Speaker 3: we get another notification and we know to contact them
• 11:51
  Speaker 3: at that point. So it's a pretty slick, pretty slick
• 11:56
  Speaker 3: and easy to navigate process like that.
• 12:00
  Speaker 2: Because I get I don't like those little forms. You
• 12:03
  Speaker 2: feel out and then you go back. Because I'm a
• 12:06
  Speaker 2: member of the National Minorities Supply Development Council, which is
• 12:09
  Speaker 2: the feeling of charge of Minority Supplyed Development Council. And
• 12:12
  Speaker 2: I would tell you it's like filling out a bank
• 12:14
  Speaker 2: loan to apply for that, you know, because they ask
• 12:17
  Speaker 2: you for your tax All that they did don't ask
• 12:19
  Speaker 2: you for is your bank statements and so, which you
• 12:21
  Speaker 2: have to have at least four months of consecutive months
• 12:24
  Speaker 2: of recent bank statement.
• 12:25
  Speaker 1: So just just here.
• 12:27
  Speaker 2: I know it's online, but if you can give us
• 12:28
  Speaker 2: a kind of like an overview, like like I just
• 12:31
  Speaker 2: mentioned tax returns, doue have to be signed bank statements,
• 12:37
  Speaker 2: What are you looking for as far as that that
• 12:39
  Speaker 2: that credit score? Just an overview of what if one
• 12:43
  Speaker 2: goes to online prior to going if they have an
• 12:45
  Speaker 2: insight of an insight of what it's to be expected
• 12:48
  Speaker 2: of them.
• 12:49
  Speaker 3: Well, yeah, obviously it's going to ask them about their
• 12:51
  Speaker 3: you know, the project and what they're looking for, right,
• 12:54
  Speaker 3: And you'd be amazed how many people aren't really even
• 12:56
  Speaker 3: sure about that part when they when they get into it.
• 13:00
  Speaker 3: But yeah, so we'll ask them what their project is,
• 13:02
  Speaker 3: what their background is. Then when you get into the
• 13:07
  Speaker 3: document uploads, we want three years of well we want
• 13:11
  Speaker 3: a business plan first and foremost. If it's a new
• 13:14
  Speaker 3: and I'm talking about a new business here, I want
• 13:16
  Speaker 3: a business plan, and we want a detail business plan
• 13:19
  Speaker 3: that shows that you actually know the business and you
• 13:22
  Speaker 3: know what you're going into. I mean, that's that's the key.
• 13:26
  Speaker 3: You know, a lot of it I can glean just
• 13:28
  Speaker 3: from looking at numbers. I can tell roughly what you
• 13:30
  Speaker 3: want to do, but I'm going to get into your
• 13:32
  Speaker 3: business plan and see how you plan to manage day
• 13:35
  Speaker 3: to day operations, how you see it going, what what
• 13:39
  Speaker 3: you see as your challenges, how you're going to overcome them,
• 13:41
  Speaker 3: that kind of thing. That that's what we really put
• 13:44
  Speaker 3: a lot of weight into that and the work that's
• 13:47
  Speaker 3: put into that. So you'll have that, you'll have any
• 13:51
  Speaker 3: cost documents, any any invoices that you're going to need
• 13:53
  Speaker 3: to pay, We'll have you upload all that stuff. It's
• 13:56
  Speaker 3: really the information that we're going to need to make
• 14:00
  Speaker 3: a credit decision. Your resume is going to be involved, obviously. Yeah,
• 14:05
  Speaker 3: the most important thing when you're laying all this out
• 14:08
  Speaker 3: is that you know exactly what it is you're asking
• 14:10
  Speaker 3: for and why you need that. I mentioned earlier, it's
• 14:14
  Speaker 3: surprising how many people show up to the process and
• 14:17
  Speaker 3: really you ask them, okay, first and foremost, what would
• 14:20
  Speaker 3: what are you looking for? And they really they look
• 14:23
  Speaker 3: at you and say, well how much can I get? Yes,
• 14:25
  Speaker 3: that's not the answer that we want to.
• 14:27
  Speaker 1: Hear, right, and I think anybody wants to say.
• 14:29
  Speaker 2: The thing about it is, this is really cool having
• 14:31
  Speaker 2: you on the show because of the fact that you know,
• 14:34
  Speaker 2: so many people are funding companies out of their pockets
• 14:38
  Speaker 2: or funding their companies through family relationships, you know. And
• 14:41
  Speaker 2: some people go online try to do go FuMB these
• 14:44
  Speaker 2: to try to get revenue for that.
• 14:45
  Speaker 1: But that business plan, and for.
• 14:48
  Speaker 2: The life of me, I never heard it associated with
• 14:52
  Speaker 2: a loan expectation.
• 14:54
  Speaker 1: But it has to be.
• 14:56
  Speaker 2: That has to be one on one and let's talk
• 14:58
  Speaker 2: to that business plan because so many people just start
• 15:01
  Speaker 2: a business based on a dream, are based on faith.
• 15:05
  Speaker 2: You're a lot of faith conversation when people go out
• 15:08
  Speaker 2: and become entrepreneurs. So talk about that business plan and
• 15:12
  Speaker 2: why people make a mistake and put that at the
• 15:15
  Speaker 2: back end before they open their business.
• 15:18
  Speaker 3: Yeah, it really surprised me because the business plan is
• 15:22
  Speaker 3: really your your bible. It's showing how you're going to
• 15:26
  Speaker 3: open the doors, how you're going to keep them open,
• 15:29
  Speaker 3: and and how you're going to pass that on to
• 15:31
  Speaker 3: the next person. So what you know, we're looking for
• 15:33
  Speaker 3: every aspect of the business. And the other thing that
• 15:38
  Speaker 3: that people find when they start doing their business plan
• 15:41
  Speaker 3: is that they didn't realize how much they didn't know
• 15:44
  Speaker 3: about this particular business when when they start we're having
• 15:48
  Speaker 3: to work through different ideas within the plan and they say, oh,
• 15:52
  Speaker 3: I didn't think of that, and I didn't think of that,
• 15:54
  Speaker 3: And that's where really a mentor can come in, you know,
• 15:58
  Speaker 3: maybe find somebody who's already in that business talking through
• 16:00
  Speaker 3: these things with those people. There are also what are
• 16:04
  Speaker 3: called SBDCs all over the country. In every major university
• 16:08
  Speaker 3: in the country has what's called SPDC. It is a
• 16:11
  Speaker 3: small business I can't remember what the acronym stand for,
• 16:17
  Speaker 3: but basically what it is, it's a free service that's
• 16:19
  Speaker 3: paid for by the SBA and you can go in.
• 16:22
  Speaker 3: They will help you with your business plan, They'll they'll
• 16:24
  Speaker 3: show you how to do your books. They do a
• 16:27
  Speaker 3: number of different things for free and they can really
• 16:30
  Speaker 3: help you flesh out what is important in a business plan.
• 16:35
  Speaker 3: But but like I said that that's really the proof
• 16:39
  Speaker 3: is in the putting in that thing that we look
• 16:40
  Speaker 3: through that and say, if you have a restaurant, we
• 16:44
  Speaker 3: want to know you know, and this will be not
• 16:46
  Speaker 3: just us, this is any lender. You know, how many table?
• 16:49
  Speaker 3: How many times is that one particular table gonna gonna
• 16:52
  Speaker 3: be sat turned? We call it, how many times is
• 16:55
  Speaker 3: that table going to be turned? What's the average ticket price?
• 16:58
  Speaker 3: What you know, what are the prices your menu, what's
• 17:01
  Speaker 3: your food costs going to run? There's a lot of
• 17:03
  Speaker 3: different aspects to that, and that's really what we're looking
• 17:06
  Speaker 3: for because so much of what we call underwriting and lending,
• 17:12
  Speaker 3: at least here, is not based as much on the
• 17:15
  Speaker 3: business as it is on the person. Who is this person?
• 17:18
  Speaker 3: Do they have the background that they need, Do they
• 17:20
  Speaker 3: have the skills that they need to do this? Have
• 17:24
  Speaker 3: they really put in the effort everything to get this
• 17:27
  Speaker 3: business off the ground, Because this is gonna be the
• 17:30
  Speaker 3: hardest job you've ever had. If you start your own business,
• 17:33
  Speaker 3: and you know this, you start your own business, that's
• 17:35
  Speaker 3: the hardest you're ever going to work in your entire life.
• 17:37
  Speaker 3: And a lot of people realize business plans setting you back.
• 17:39
  Speaker 3: You're gonna have real problems once you open the door.
• 17:41
  Speaker 2: And I really wanted to bring that out because of
• 17:43
  Speaker 2: the fact that a lot of people will get frustrated
• 17:46
  Speaker 2: in cerch situations. People might say, Hey, you know, I'm
• 17:49
  Speaker 2: being rejected because of the color of my skin. In
• 17:51
  Speaker 2: some cases it does happen, but there is a process,
• 17:54
  Speaker 2: and the process can frustrate you because it's so detailed,
• 18:00
  Speaker 2: ask a lot of you and sometimes the frustration of
• 18:04
  Speaker 2: because you're not ready at that moment. You might be
• 18:07
  Speaker 2: ready six monthsly, or you shouldn't open a business at
• 18:10
  Speaker 2: all because you are ready.
• 18:13
  Speaker 3: Right, No, that's exactly right, And you know that is
• 18:15
  Speaker 3: a big part of my job, our job as a lender.
• 18:20
  Speaker 3: Sometimes it's just to say no. It's because you're these
• 18:25
  Speaker 3: people are going into a contract. They're gonna borrow a
• 18:29
  Speaker 3: lot of money. They're gonna put a lot of their
• 18:32
  Speaker 3: life on the line here in terms of you know,
• 18:35
  Speaker 3: their their their business, everything that they do. If that
• 18:40
  Speaker 3: business fails, they're not even gonna lose all that money.
• 18:43
  Speaker 3: They're gonna owe all the money that they borrowed from
• 18:45
  Speaker 3: the lender that's going to follow him around. I mean,
• 18:48
  Speaker 3: this is a huge decision. So sometimes it's up to
• 18:51
  Speaker 3: us to say, you know what, you're not ready yet.
• 18:53
  Speaker 3: You need to do this, this and this and then
• 18:56
  Speaker 3: we can talk. But it's a huge decision and it's
• 18:59
  Speaker 3: a huge responsibility on our part too, because you have
• 19:03
  Speaker 3: the capability of ruining somebody's life if you don't make
• 19:07
  Speaker 3: the right decision.
• 19:08
  Speaker 1: Kreik.
• 19:08
  Speaker 2: He has some really interesting questions that I wanted to
• 19:11
  Speaker 2: bring into the show because I think it provides variable
• 19:14
  Speaker 2: insight to people. Because when we're talking to Currier Califari,
• 19:17
  Speaker 2: you know he's the executive vice president director of Lending
• 19:20
  Speaker 2: for Arkansas Capital Corporation. Arkansas Capital, if you don't know,
• 19:24
  Speaker 2: it's a private, nonprofit lending corporation dedicated to empowering entrepreneurs
• 19:29
  Speaker 2: in Arkansas and the surrounding state. That's how he's starting
• 19:32
  Speaker 2: out right now. He wants to work because he just
• 19:34
  Speaker 2: got approved to do this hadn't been done in forty
• 19:37
  Speaker 2: years to go national, but he only works with the
• 19:39
  Speaker 2: surrounding states. Initially, I'm not saying if you listen to
• 19:42
  Speaker 2: this show, you can't go to the website and fill
• 19:45
  Speaker 2: out the form.
• 19:45
  Speaker 1: It's an online form, very detail.
• 19:48
  Speaker 2: You're basically filling out an application you're filling out an application.
• 19:52
  Speaker 2: If you click the registration button, it's not one of them.
• 19:56
  Speaker 2: We're gonna contact you later and it's going to ask
• 19:58
  Speaker 2: you for all the new necessary documents that will.
• 20:02
  Speaker 1: Require you to qualify for what.
• 20:04
  Speaker 2: You're trying to attempt here, and what I'm not trying
• 20:06
  Speaker 2: to do on the show is encourage you not to
• 20:08
  Speaker 2: do anything.
• 20:09
  Speaker 1: I'm encourage you to prepare to do with different things.
• 20:13
  Speaker 2: And one of the things you said in your questions
• 20:15
  Speaker 2: is that small business ownership establish a line of credit
• 20:18
  Speaker 2: with immediate access, especially for small businesses with payroll employees.
• 20:23
  Speaker 3: Talk to me, well, yeah, a line of credit is
• 20:26
  Speaker 3: important because every business has unexpected expenses that pop up.
• 20:34
  Speaker 3: Let's assume it's not a business that needs an lining
• 20:37
  Speaker 3: credit in normal course of business. You just wanted a security.
• 20:41
  Speaker 3: It doesn't necessarily have to be a large line of credit.
• 20:43
  Speaker 3: You're not going to pay on the money that you're
• 20:45
  Speaker 3: not using. But it's a good idea for a lot
• 20:49
  Speaker 3: of different businesses to have that just as a backup, because,
• 20:53
  Speaker 3: like I said, things always pop up. You don't want
• 20:56
  Speaker 3: a big a rock going through a picture window shut
• 21:00
  Speaker 3: down your business because you didn't have enough money to
• 21:02
  Speaker 3: fix the window, right, you know, stilly little things like that.
• 21:05
  Speaker 3: So a lot of times a line of credit is
• 21:07
  Speaker 3: very important. Some businesses just can't function with that line
• 21:10
  Speaker 3: of credit. If you get into construction or something where
• 21:12
  Speaker 3: you're laying out a lot of money up front before
• 21:15
  Speaker 3: you're going to get paid, then those lines of credit
• 21:17
  Speaker 3: become absolutely necessary.
• 21:20
  Speaker 1: Well, you know, but when I'm.
• 21:21
  Speaker 3: Small businesses should look at just having a little cushion
• 21:24
  Speaker 3: in the bagree.
• 21:26
  Speaker 2: You know, I will tell you, Correig, I've broken all
• 21:29
  Speaker 2: the rules, the wrong rules, you know, opening up you know,
• 21:33
  Speaker 2: on the on faith. This is what I want to do,
• 21:36
  Speaker 2: getting in business with partners with no contract. The whole
• 21:41
  Speaker 2: idea was just to make money.
• 21:43
  Speaker 1: That was my goal.
• 21:44
  Speaker 2: And I think that's the average entrepreneur. They just want
• 21:47
  Speaker 2: to make money. They see the possibilities, but they don't
• 21:50
  Speaker 2: see the ramifications of not setting it up correctly. And
• 21:55
  Speaker 2: I'm talking to you, not trying to get you to
• 21:58
  Speaker 2: do a book one on one some advice like three
• 22:02
  Speaker 2: pointers about starting your own business.
• 22:05
  Speaker 3: Great, know what you want meaning exactly, Let's let's talk
• 22:12
  Speaker 3: about what what you need to do when you come
• 22:14
  Speaker 3: to a lender like me. Know what you want and
• 22:17
  Speaker 3: know why, not only why you need it, but how
• 22:20
  Speaker 3: much it's going to cost. M h that I mean,
• 22:24
  Speaker 3: that's I keep going back to that. That is the key.
• 22:27
  Speaker 3: You really want to know you and this is going
• 22:29
  Speaker 3: to happen in your business plan. It's going to flesh
• 22:31
  Speaker 3: out a lot of this you're you're going to see.
• 22:34
  Speaker 3: You know, you might have said, oh, well, I'm going
• 22:36
  Speaker 3: to open this this plumbing company and we're going to
• 22:39
  Speaker 3: have this big, really cool, you know, antique truck that's
• 22:42
  Speaker 3: going to drive around town.
• 22:43
  Speaker 1: Right.
• 22:44
  Speaker 3: Oh you know it's going to cost one hundred thousand dollars,
• 22:46
  Speaker 3: but it'll give me great advertising. Well, you start going
• 22:48
  Speaker 3: through the numbers of everything. How important is that really?
• 22:51
  Speaker 3: It's that's maybe something you do down the road. So
• 22:55
  Speaker 3: you get down to the nuts and bolts. What you
• 22:58
  Speaker 3: need to open, what you need to operate, You need
• 23:00
  Speaker 3: to keep the doors open. That's it, and you but
• 23:03
  Speaker 3: you got to know it. And it's that that first
• 23:08
  Speaker 3: and port that's the most important thing is know.
• 23:10
  Speaker 2: What you're talking about in that business plan that you
• 23:14
  Speaker 2: that they tend to forget.
• 23:15
  Speaker 1: Because I'm gonna keep coming back to that greatause.
• 23:18
  Speaker 2: My big takeaway is that business plan, because I kid
• 23:21
  Speaker 2: you not. I opened my comedy club in nineteen ninety two.
• 23:24
  Speaker 2: I did not have a business plan. I counted people
• 23:28
  Speaker 2: who came through that door. I knew how to you know,
• 23:31
  Speaker 2: have my budget, you know, fly comedian in charge, ten
• 23:34
  Speaker 2: dollars advertisement for the radio stations.
• 23:37
  Speaker 1: But who I was going to have working that weekend.
• 23:40
  Speaker 2: But that's not a business plan because I was just
• 23:43
  Speaker 2: doing weekend the weekend. I wasn't projecting ninety days. I
• 23:46
  Speaker 2: wasn't projecting a year or let alone five years. I
• 23:50
  Speaker 2: was just going day to day basically, And that's not
• 23:54
  Speaker 2: a business plan.
• 23:55
  Speaker 1: And that's what you're talking about, correct.
• 23:57
  Speaker 3: That's exactly right. Yeah, I'm a former business owner. I've
• 24:00
  Speaker 3: right out of college, I opened restaurants, and yeah, we
• 24:04
  Speaker 3: didn't do it with a business plan, and I really
• 24:07
  Speaker 3: wish I had because I spent probably a year undoing
• 24:10
  Speaker 3: things that I had done, you know, that I wouldn't
• 24:13
  Speaker 3: have done had I really thought it out ahead of time.
• 24:16
  Speaker 2: Yeah, I want to ask you about the SBA, you know, yeah,
• 24:20
  Speaker 2: a small business administration, And my reading is said the
• 24:24
  Speaker 2: SBA does not lend money. Instead, it provides guarantees, so
• 24:28
  Speaker 2: lenders are more inclined to lend money to small business owners.
• 24:32
  Speaker 1: Please explain that to me.
• 24:34
  Speaker 3: Yeah, that's what a lot of people don't realize that.
• 24:36
  Speaker 3: The SBA does not lend out money. What the SBA
• 24:39
  Speaker 3: does is they provide guarantees to lenders. So if I
• 24:43
  Speaker 3: were to do a small business loan, let's pick a
• 24:46
  Speaker 3: round number, like, you know, one hundred thousand dollars, right,
• 24:50
  Speaker 3: they would give me, as a lender, a guarantee of
• 24:55
  Speaker 3: let's say it's a higher amount, like five hundred thousand.
• 24:58
  Speaker 3: On one hundred thousand, they would give me a guarantee
• 25:00
  Speaker 3: of eighty five percent. On a half million or a million,
• 25:04
  Speaker 3: they would give you a guarantee of seventy five percent.
• 25:07
  Speaker 3: So what that does for me is a lender, I
• 25:10
  Speaker 3: know that I've got the SBA behind me for seventy
• 25:12
  Speaker 3: five percent of the money I'm going to lend out.
• 25:14
  Speaker 3: I'm only on the hook now for twenty five That
• 25:17
  Speaker 3: lowers my risk to the point where I might take
• 25:21
  Speaker 3: a chance on somebody who's starting a business who's you know,
• 25:26
  Speaker 3: maybe doesn't you know. SBA loans are usually lacking one
• 25:32
  Speaker 3: component that a bank likes to see, and it can
• 25:35
  Speaker 3: be a number of different things. Maybe there's a collateral
• 25:38
  Speaker 3: short pall. Maybe they're new, you know in town. Maybe
• 25:41
  Speaker 3: it's most banks don't even want to talk about startup
• 25:44
  Speaker 3: businesses and so that that's a big one. So it's
• 25:52
  Speaker 3: the SBA will allow us. It gives us just that
• 25:55
  Speaker 3: comfort level to be able to take that leap.
• 25:58
  Speaker 2: Okay, let me just great, you know, okay, SB Because
• 26:01
  Speaker 2: I always hear them talking about loans, especially when COVID happened,
• 26:04
  Speaker 2: they was talking about these different types of loans and
• 26:06
  Speaker 2: these these integrate different tied to the loans. Is that
• 26:09
  Speaker 2: different than what we're talking about now.
• 26:10
  Speaker 3: Yeah, completely different that those those the PPP load programs
• 26:15
  Speaker 3: are over. Okay, all that money has been allotted and
• 26:19
  Speaker 3: everything else. And as a matter of fact, that's one
• 26:20
  Speaker 3: thing that's really changed things quite a bit is we
• 26:23
  Speaker 3: get a lot of people that come on our website
• 26:26
  Speaker 3: think it is free money, and they did. They come
• 26:28
  Speaker 3: on there and then we'll give a call say you know,
• 26:31
  Speaker 3: this is a loan. They're like, oh, I have to
• 26:33
  Speaker 3: pay a pack.
• 26:34
  Speaker 2: Yeah did you hear that, my listeners, you have to
• 26:38
  Speaker 2: pay this back?
• 26:39
  Speaker 1: Why would they have that? Why would they think that?
• 26:41
  Speaker 3: Why would they because the PPP loans we were forgiven
• 26:45
  Speaker 3: most of them. You can you could apply to have
• 26:47
  Speaker 3: those forgiven, and so people just thought, oh, yeah, that's
• 26:50
  Speaker 3: still going on. It's not. You know that the programs
• 26:53
  Speaker 3: we're talking about primarily are the seven A program and
• 26:56
  Speaker 3: the five H four program. Those are specifically for small businesses,
• 27:02
  Speaker 3: owner occupied businesses. So if you're looking to build a
• 27:07
  Speaker 3: residential neighborhood, this is not for you. If you're going
• 27:11
  Speaker 3: to buy a building for your plumbing company or whatever,
• 27:14
  Speaker 3: this is where you want to.
• 27:15
  Speaker 1: Go, right right right.
• 27:17
  Speaker 2: You know the thing about it is that now we're
• 27:20
  Speaker 2: not talking about PPPR SBA.
• 27:24
  Speaker 1: You're saying that they do not lend money.
• 27:28
  Speaker 3: In this sense. PvP they did, and for disasters they
• 27:31
  Speaker 3: lend out some money. These two programs they do not
• 27:34
  Speaker 3: lend money.
• 27:35
  Speaker 1: So what does SBA do.
• 27:37
  Speaker 3: You're saying that they are They provide a guarantee.
• 27:39
  Speaker 1: Okay, that's what I'm confused.
• 27:41
  Speaker 2: Okay, So you go to SBA, and what's that conversation
• 27:45
  Speaker 2: that you're going to have with them so they can
• 27:48
  Speaker 2: go to you and get the money.
• 27:50
  Speaker 3: Okay, the borrower will never talk to SBA, They'll come
• 27:55
  Speaker 3: to us. Okay, the borrower doesn't ever interact with SBA.
• 28:00
  Speaker 3: The SBA deals strictly with the banks, and if you
• 28:02
  Speaker 3: contact the SBA, although do is give you a list
• 28:05
  Speaker 3: of banks that do SBA loans because you have to
• 28:07
  Speaker 3: be an approved lender with SBA. Okay, so you come
• 28:12
  Speaker 3: to you come to us. We deal with the SBA,
• 28:15
  Speaker 3: and Arkansas Capital is called what's called a preferred lender,
• 28:20
  Speaker 3: So we don't even go through SBA underwriting. Now a
• 28:22
  Speaker 3: lot of banks have to go through SBA underwriting and
• 28:25
  Speaker 3: that adds time and a lot of other things to
• 28:28
  Speaker 3: the process, but we don't even have to do that.
• 28:30
  Speaker 3: SBA trust us, they know we've been around, so we
• 28:33
  Speaker 3: do our own underwriting and when we close the loan,
• 28:38
  Speaker 3: there's certain documentation that we send SBA and they provide
• 28:42
  Speaker 3: us with a guarantee. So if you didn't pay your
• 28:46
  Speaker 3: loan back and you still owed me, after we liquidate
• 28:50
  Speaker 3: everything and everything's all done and there's still say one
• 28:53
  Speaker 3: hundred thousand dollars that's still owed, the SBA would would
• 28:58
  Speaker 3: pay us seventy five thousand. That would we would be
• 29:01
  Speaker 3: out twenty five and then the SBA would go and
• 29:04
  Speaker 3: collect on that that hundred It would be up to
• 29:07
  Speaker 3: them from that point right on and they would give
• 29:11
  Speaker 3: it to treasury. And that's what I was talking about earlier,
• 29:14
  Speaker 3: and Treasury will follow you around for the rest of
• 29:15
  Speaker 3: your life, right, so it's really important that you you
• 29:19
  Speaker 3: want this loan.
• 29:22
  Speaker 2: You dropped a nugget on it with the business plan,
• 29:25
  Speaker 2: even though I know that's important that he had come
• 29:28
  Speaker 2: out of your mouth and this is what you do
• 29:30
  Speaker 2: financial lending. Because I had a conversation with a client
• 29:33
  Speaker 2: of mind the day talking about getting the line of credit,
• 29:36
  Speaker 2: and I talked about a business plan, but I didn't
• 29:39
  Speaker 2: say the words business plan, you know, And I think
• 29:42
  Speaker 2: that that has to become a normal point of my
• 29:45
  Speaker 2: vernacular so they can understand the role that when you
• 29:49
  Speaker 2: start playing.
• 29:49
  Speaker 1: Because I always tell people the advice.
• 29:51
  Speaker 2: You know, I always live at least six months of
• 29:53
  Speaker 2: income on your bank just in case something go wrong.
• 29:55
  Speaker 2: Certain terms, but certain terms you say. But until you
• 29:59
  Speaker 2: say the right term, the right buzzwords, it doesn't win,
• 30:02
  Speaker 2: and more importantly winning with what you're.
• 30:05
  Speaker 1: Trying to do.
• 30:05
  Speaker 2: Again, thank you Greg for coming to my show, Money
• 30:07
  Speaker 2: Making Conversation master Class. Great interview, made, really really great interview,
• 30:11
  Speaker 2: and we'll be talking again if we can like, you know,
• 30:14
  Speaker 2: twice a year just talk to you.
• 30:15
  Speaker 1: I love that. I think that it's important.
• 30:18
  Speaker 2: Things happen seasonal, you know, and what we're talking about
• 30:21
  Speaker 2: now is different from what we were talking about in
• 30:23
  Speaker 2: the spring because tax season and employment types of leads
• 30:27
  Speaker 2: and all those things. So again, thank you for coming
• 30:29
  Speaker 2: on Money Making Conversation Club CREG.
• 30:30
  Speaker 3: Thank you.
• 30:31
  Speaker 2: This has been another edition of Money Making Conversation Masterclass
• 30:34
  Speaker 2: posted by me Rashaun McDonald. Thank you to our guests
• 30:38
  Speaker 2: on the show today, and thank you listening to audience now.
• 30:41
  Speaker 2: If you want to listen to any episode I want
• 30:43
  Speaker 2: to be a guest on the show, visit Moneymaking Conversations
• 30:46
  Speaker 2: dot com. Our social media handle is money Making Conversation.
• 30:50
  Speaker 2: Join us next week and remember to always.
• 30:52
  Speaker 1: Leave with your gifts. Keep winning the