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Financing Business Expansion

Do you want to grow your business and capitalize on increased economic activity? Many entrepreneurs are taking this opportunity to focus on either organic growth or acquisitions - or both. Still others are interested in establishing a new business. Community bankers, like First Mid, are poised to assist business owners to successfully grow their enterprises for the benefit of its owners, employees, and the community. Often, lenders partner with the Small Business Administration (SBA) to facilitate financing for growth which the bank couldn't provide on its own. The SBA provides a partial guarantee and additional assurance to the bank to facilitate a loan or loans as discussed below.

Community bank lenders can be a great partner and resource and for companies to expand internally or organically. If you need to expand production or storage facilities, and add heavy equipment to accommodate growth, lenders can provide financing to combine existing debt with funding needed for expansion. The SBA 504 program can be a great solution because it typically requires less equity than conventional financing, and provides long-term fixed rate financing for up to 40% of the project. You might find yourself requiring additional capital to finance transportation equipment, inventory and accounts receivables to grow your business. Here again, community lenders can provide assistance by financing the growth of those assets with enhancement of the SBA 7a program, if needed.

Community bank lenders can also help companies expand when they acquire complimentary businesses, which result in a stronger organization. Again, the SBA 504 program has particular advantages for financing business real estate and long-term assets. Perhaps you find your business needing financing for the purchase of operating assets of a target business. SBA guarantees under the 7a program are often used to enhance acquisition loans when a collateral deficiency exists, such as when financing is needed to fund some portion of goodwill or 'blue-sky'.

As a business owner who plans to seek capital for growth, it's important to consider how this growth meshes with your business plan. Development of the business plan will help determine how much additional capital the business needs, and for what exact purposes the funds are needed. If owners need assistance developing a business plan, they can contact their local SCORE or Small Business Development Center offices. More information about the Champaign offices can be found at and

In an improving economy, opportunities will exist for business owners to expand their businesses. Community lenders and the SBA are poised to assist by providing financing for those growing businesses. Now is a good time for business owners to update their business plan and contact their lenders to discuss opportunities for the future.

Mitch Swim is the Regional Community Banking President for First Mid-Illinois Bank & Trust. You may reach Mitch and the local First Mid commercial lending team at (217) 359-9837.