Wednesday, June 03, 2009

MugsyClicks becomes SBA Recovery Act Recipient

It is truly a sign of the times when borrowing money makes you news worthy but that is exactly what happened this week. We are truly grateful to have received a SBA guaranteed loan thru One California Bank in Oakland to help us spread our mission of providing children, families and schools with quality photography. Growing our company will put community photographers to work in an economy where often art is the first thing to go. Below you will find a copy of a blog that chronicles my journey to capital. I originally created the blog for the Make Mine A Million Dollar Business Race ( share with my sisters in business all the ups and downs of committing to debt. I have put it in chronological order so you can enjoy my process.


Show Me the MONEY

March 14, 2009

SBA Loan- Journey to revenue News Update: My local community bank let me know earlier in the week that SBA loans were being guaranteed by the feds up to 90% and banks are feeling very much better about loaning money. After hearing this I immediately began the journey toward funding and thought it might be fun to share this process with my Count Me IN sisters so here goes:

Monday Morning-3/9- Spoke to Robert, the bank SBA loan rep. Made an appointment to meet on Friday. He provided me with forms to fill out.

Tuesday 3/10- Filled out application. Pulled P&Ls and balance sheets.

Wednesday 3/11- Made copies of 3 years of personal tax returns. Copied LLC corp. materials. Began updating 2009-10 projections. Reviewed and updated executive summary. Was really glad I had spent as much time with Ellen Rohr and Libby Ladu who taught me the value of having a working business plan. It was easy to bring things up to date. Once again gave me focus.

Thursday 3/12- Pressure is on. Must have all documentation ready by Friday 1pm. Worked until 12 AM on projections, assumptions and intentions. Basically telling the bank what I needed the money for and how I was going to pay it back. It is important to be crystal clear here. Having a working business plan with a Top Projects list made this easier. I knew what I wanted to do... complete website, consolidate debt and finance sales and marketing push. I outlined how I was going to use the money. The Internet made this fast as I could estimate trade show and printing costs quickly. Other expenses I estimated from experience. Came up with a needed number $250K.

Took a deep breath. Looked at projections, reviewed past year's P&L's. Everything looked good because we have been "ON" our numbers monthly.

Friday 3/13- Woke up early and began printing, reviewing and organizing documentation. Put together a presentation package of marketing and press materials. Put on my Gayla Bentley clothes so I would feel grown up, tidy and professional. Left for bank nervous but optimistic.

My daughter called and reminded me I was powerful and to leave any doubt about my business or self at home in bed. Good advice. Got to bank early. A good omen since I am regrettably one of those people who always try to put just one more thing into a minute and feel the pain of it frequently.

Bank security guard greeted me by name. Wow. Go "One Cal Bank" Oakland! Robert wasn't ready for me early so they let me in the break room for a cup of tea. Nice. Friendly. Darn right neighborly. Robert found me and we went into the conference room. I shared my passion of my company and my dreams. I explained my projections. Answered questions regarding my assumptions. Signed copies of paperwork. He gave me some great suggestions regarding ways to streamline my banking. I felt like I was meeting with a consultant instead of a loan officer. A bank partner in my success. With a warm handshake I left my plans, accounting records, tax returns and future opportunities in his hands. He told me things looked good and I would hear back from him by next Thursday with the bank's decision. The security guard smiled as I left waving "see you soon". I will update in real time here!!


March 16, 2009

Like buying a house. There are a lot of paperwork requests to apply for this SBA loan. A few things I didn't even know existed. In addition to documentation of LLC I needed an "Operating Agreement". Since I am the only member of the MugsyClicks Corporation I had not created one of these. I went online and found a free download and adapted it. I had to dig my fictitious business license out of the files as well as a lease agreement for my studio. Below is a complete list of necessary forms and documentation: ¨ Application¨ Personal Financial Statement ¨ Statement of personal History for each borrower or co-borrower (912 form)¨ Certification Regarding Debarment¨ Tax Transcripts Verification request ¨ Articles of Corporation¨ Operating Agreement¨ Copy of Business License¨ Fictitious name statement¨ Borrower resume¨ Executed Lease¨ Signatures on all borrowers’ financials (can be sign after loan has been approved)¨ 159 Fee Compensation Disclosure (needed only after loan has been approved)I faxed most of the documents (took 30 minutes). I am nervous but excited; with money I can pursue my business dreams with pinpoint focus.


March 19, 2009

Email from SBA Business Loan Manager:"Prequal letter on way, just like promised.” My heart leaped, I wanted to call someone and celebrate. 30 minutes later I feel like throwing up. So much money, so much responsibility. What if, what if, I am "if-ing" all over myself. I am short tempered with staff. I jump in the car to occupy my racing mind with errands. I try to think who I can process this experience with, who do I know that has ever signed their name to a quarter of a million dollars in business debt. This is a M-3 sister moment cause my list of girlfriends does not include CEOs. Yoga instructors, photographers, flight attendants-I leave messages with a few M3's who are thankfully unavailable because what I really need to do is just sit, breathe and go back to my business plan. The plan is there. No bank in this economy is going to loan me money if they don't think I can do this...I get the car washed, eat lunch in a busy cafe where I can give out business cards and decide to sleep on it. Let my breath catch up to my imagination. Tune in tomorrow. Funding ahead

New Day- SBA Loan Pursuit Day 7

March 20, 2009

Woke up strong and regenerated with ideas. Of course debt is scary, I wouldn't be doing right by myself if I wasn't aware of the responsibility but it is also the absolutely correct step for our business growth. Mugshots needs fuel, it cannot grow on just my energy alone, I undermine my business potential when I constrict- it's not like I didn't do my homework. I ran my numbers conservatively as well as explosively. I love the fact that this loan is part of the "stimulus package". I woke up realizing that I am part of the solution to the economy. I certainly believe I will be a good steward to the loan and it feels good to know I am an American citizen doing my part. This is a completely new experience for me on so many different levels. For many years I have seen my business as "mine" now I look at the 15 Mugshots photographers and see an "us". We are part of the Obama vision of America and my heart is full. So now I wait for the pre-qual letter. One of my facebook pals, a former business big wig, gave me the head's up regarding "Covenants?” His post was: Wishing you great success Linda. Covenants? Sounded vaguely biblical with a twist of witchcraft.... I immediately googled "Covenants"- Ah, the terms of the loan. Got to be aware of what I am risking. What the bank wants in the way of assurances that I WILL respect their investment. I will update soon.


March 20, 2009
I have been getting emails from other M3 sisters looking for details. Here are some more...My credit score is 758, it has gone down due to my high credit card debt which is one of the things I am consolidating with the SBA loan. I included in my presentation package. Marketing Materials, an updated executive summary statement from my business plan, a page that outlined why I wanted the money and what I was going to do with it. I also included a list of my board of advisers. I was later asked for a business resume which I put together using a template from iwork pages (they are cool). On the resume I listed Make Mine A Million and our latest win- Best of Marin.


March 20, 2009

From Monica with Health-e lunch: "hi again, I just heard back from Bank of Amer. they said I have to be 2 years positive cash flow to qualify for any loan... GRR! I'm not, are you 2 years positive CF? Thanks so much, sorry for all the q's!" Yes, I have been in the black, but barely. Forget B of A. I tried to get a line of credit with Wells and they completely blew me off and I have been banking with them over 20 years. Find a SBA certified business bank. A community bank. Someone who will listen to your mission and your story. My experience before ONE CAL BANK in Oakland was an ambitious young suited graduate anxious to sign me up for whatever promotion Wells is running (I think they get paid by the sign up). I went for the okie doke only to find my credit dinged by their review and a "no go" on the loan. No one ever even asked to see business plan or assumptions. It seems to me it is all about the programs they are running ... that and sending them my merchant business. Plus all their money is going toward absorbing other banks. Find a bank that is truly invested in community development.


March 23, 2009

My pre-qual letter arrived and now I have new language to learn. UCC1 on business assets required= A lien on my business. No personal collateral required. Principal Payments Only- acceptable to pay extra on principal not interest. No pre-payment penalty so if I sold the business or when I have a ROCKIN good year I can pay off the loan without 10 years of interest. On the personal level I decided to review my plan again to quiet my nervous nellies. Everything looks doable. Tomorrow I drop of my good faith payment of $500 and signed pre-qual letter and will be looking for funding next week.


March 25, 2009

Headed over to ONE CAL bank this morning for an 11AM appointment with my new best friend, Robert, to sign submission documents for my SBA 7a loan. It even has a name, catchy if you hum it while driving. SBA 7A, SBA 7A, SBA 7A, can't you feel the rhythm? Once again smiles at the door before we entered the conference room. Robert was informative and very patient with all my questions. He is definitely my ally in this process. He reassured me that many people were nervous when signing their name to 300K in debt. We discussed the best way of securing this money for cash flow purposes. My present plan is to pay down all my high interest debt, pay my vendors and then park the balance in a savings account to use as my own lending tree. This way rather than hitting cards during the slow season I can create my own business line of credit to draw down and pay back. Brilliant. I have looked closely at my hinge factors (another new concept) so we know exactly what we have to accomplish here at Mugshots to be successful. Hinge Factor was explained to me as "the two or three things that MUST come true for Mugshots to be successful". This process gives us something concrete like, "average new photographer sign-up is xxx/yyy" or "number of heads photographed x various buy rates", to hang our income door on. This exercise was brought to me by one of my more conservative (if the sky falls in) advisers, who suggest, "a bottom up P&L plan based on all the detailed items that go into it." He doesn't like, doesn't like at all, plans based on "we can grow by X percent" ideas. Luckily, we have numerous hinges in our projections so we can stay on top of our income to debt quickly if there is a change in our revenue assumptions. So after much signing (my signature getting messier and messier) I left with a handshake turned into a hug for Robert and a new date to look forward to: Commitment Letter Time-this coming Friday, 2 weeks from the beginning of this process. I believe there are probably conditions ahead... liability insurance, etc.


March 25, 2009

Oh, yes. I also left a $500 good faith deposit to cover the costs of drawing up docs. I also think it is worth noting that a businessperson, such as myself, can borrow a maximum of 2 million dollars, yes that is 2 millions of ones, on the SBA7a. That said this is one borrower's total revenue access. So, if I were a partner in another business that was interested in pursuing an SBA7a, my present debt (or soon to be present debt) would count against that loan potential. That would mean the partnership could only borrow 1.7 million from the SBA cause I already drew down 300K. I realize that most of us here at Make Mine A Million are not yet ready for the 2 million debt but I wanted to give you a peek at all the details. As I understand them, newbie that I am.


March 26, 2009

This morning I write empowered. Knowing that money is on its way is an amazing feeling. I am alive with the possibilities. Over the years I have had money in the bank, no money in the bank and really no money in the bank, with money on the way. This year I will have a reserve that is really a reserve. That is a powerful feeling. Now I can really work my plan without the fear of being flat broke. I can set attainable goals and have the capital to work those goals. While the risk is larger (the size of the loan) this is a "big girl pants" opportunity to grow Mugshots from a position of more financial strength. My mind has been spinning with ideas but I know that each idea must find it's way into the Mugshots business plan if it requires funding. I am a responsible steward of money and believe in fiscal responsiveness AND fiscal responsibility. But for today, my mind dances with a shopping list of Mugshots possibilities and the music is great!


March 26, 2009

Just received a call from Robert at ONE CAL BANK (! Hurrah! The bank’s committee has signed off the loan. Robert asked to verify some debt on my balance sheet which was easy because my twice monthly balance sheets, P&Ls and Financial Quick Checks are in a notebook right next the phone. Thank you Cheryl! Your bookkeeping records are up to date, clean and impressive. A Financial Quick Check (FQC) is Ellen Rohr of Bare Bones Biz's (monthly snapshot form that allows me to see at a glance my Income, COS, COGS, GROSS PROFITS, OPERATING EXPENSES, NET PROFIT, CASH FLOW AND QUICK RATIO. I have been trained to look at these to make sure numbers look good. I am not proud to admit sometimes I don't want to look at them, I would rather pretend, but ultimately reality is better than denial. And if I was soul searchingly honest, sometimes I feel broker than I really am. One of the great things about the FQC is that it also shows me how the money compares to last year, to the budget, YTD numbers and how much money is available in the bank. So now my financial future is headed to the Small Business Administration for approval. Luckily One California Bank is a SBA preferred lender so things are looking really good. Once the money is approved the funds will go into a checking account at the bank for use toward my expansion plans. Look out schools, photographers, kids and parents there are "school portraits worth framing" headed your way!!! is humming grow, grow, grow!


April 1, 2009

Now it is all in the government’s hands. The SBA has my paperwork and all I can do is wait. This morning I emailed Robert to check in. He emailed back he hoped to hear something by Friday but rumor has it Sacramento has been over-run with people like me scrambling for capital. Capital from the capitol. Ever intuitive he emailed me again with his support: (thanks M3 for teaching me to reach for the top). “Linda, I am very confident with your loan application. As I stated when I spoke with you last, you are the ideal candidate for this program. Minority based (woman owned), business savvy and an unquestionable entrepreneurial drive to be the best informed person you can be...If the SBA does not see that from my recommendation then there is something wrong with their faculties and I did not do my job to best market your skills. Until then, I will wait till they respond. I will reply as soon as I get word from SBA. Thank you for your patience.”

Funding Next Week

April 17, 2009

I am delighted to share that loan approval from the SBA has come!! Patience once again became a cornerstone of this process, as I have had to wait an extra week for funding due to a previously planned trip to DC to visit my daughter. Evidence of Insurance language became a multi-phone call challenge. I had not updated my business to reflect my LLC status (never even occurred to me) but these details are important to the loan process so it is good to make sure there is consistency in all your business documentations when entering into this process. I am excited about all the possibilities this funding offers. Clearing the credit card debt, knowing I have the capital to finish my technology projects and marketing plans is exhilarating. Yesterday as I biked thru the national mall from the Jefferson to the FDR memorial I was taken by the power of vision matched with commitment and timing. Still these intentions must be met with access and I am grateful for access to these monies to help make my business flourish.

Signing Final Loan Docs- 2 days until "money in the bank"

April 20, 2009

I am back from DC. Completely inspired by the chest forward atmosphere of our nation's capital. I had never been to Washington DC before Make Mine A Million, the "district" always seemed to represent someone other than me. But that has changed. As I stood at the fence before the White House I was amazed at the completely different vibe than my first visit in October of 2007. This time the sidewalk was lined with a rainbow of families instead of protesters. In so many accents the word Obama rang. This visit reflected not fur coats and Brooks Brothers but colorful dashikis, red, white and blue trucker caps, and every manner of Obamawear. Groups, as well as individuals, all with cameras witnessing their visit to the “house of Obama”. Hundreds of eyes scanning the yard for a bouncing dog named Bo or 2 happy children returning from school. Later when the presidential helicopter flew across the sky, thousands of arms raised throughout downtown DC in waves to our new leader in change. This time I am a member of the tribe! Change has come to me! Monetary Resources offered and opportunities expanded. 2009 is my year! I have turned off the bad news and responded to the good. For the last 8 years I have built a business in the shadow of an economy that invested in the few while the many scurried to keep up. I built a business brick by brick while the government undermined my foundation with war, greed and unchecked power. Tossed me a $600 tax recovery rebate while asking my future to assume a massive debt. Now in a few short months I have seen my hard work and due diligence rewarded. Access to funding provides a concrete tool to grow. Scary? Yes. Powerful? Intoxicating. Practical? Absolutely. Investment in my business has always proven profitable. I know it has as I have been doing it for years. So here I am 100 days into 2009, with stabilized sales AND increased potential. No television news screaming failure is playing in my house, we are too busy planning how to hire and train more photographers and the best way to share with more schools our revolutionary "school portraits worth framing"!

Practical considerations here:
Needed DL to verify identity, a blank check to cover loan fees. Lots of papers to assure bank, SBA etc. that I understood my legal rights and obligations. Wasn’t surprised to find out that this money was NOT to be used for investing in Ponzi schemes, marijuana farms or a long desired vacation. This money is for MUGSHOTS growth only. (If I was really honest, there have been times during the last month that I fantasized this money as “genie wish”). I also verified a willingness to keep the bank up to date with my yearly taxes and financial statements. I clarified that the bank would send reminders regarding their desired paperwork. Good to know.


April 24, 2009

Hi Linda, Congratulations we have funded your loan. Would you like me to send out the cashier checks or would you like to come to pick it up and put it in the mail yourself? Also, please send me the original settlement sheet back to you via mail. Thank you Pauline Nguyen AVP, SBA Closing Officer One California Bank, FSB1438 Webster Street, Suite 100Oakland, CA 94612Ph: 510.550.8427

Money In the Bank Options

May 23, 2009

So the SBA money went into my new money market account early in the month and I sprung immediately into...inaction. Partial paralysis, it felt so good having money in the bank my inner Scrooge wanted to visit the vault just to stack it and roll about in it's essence. Forget the economy, forget growing a business, just let me stretch out on the couch and feel secure. Well, that phase, like the rest of this borrowing money experience, came and then departed like the morning fog in San Francisco. The winking sun came when I realized every month I paid my loan payment out of borrowed capitol was not only money not invested in my business, it was decreasing access to my cherished options. In case that isn't clear... if I have 300K in capital and I pay $3000 a month to use that capital from the 300K I have banked I now only have 297K left to work with. Probably obvious to everyone but me from the beginning but when my inner insecurity runs from my inner ambitious I sometimes lose sight of the obvious. Next visit I will share all the wonderful things my ambitious creative self is energizing with capital.

Marketing 101

May 26, 2009

I love marketing. I love conceptualizing programs, energizing ideas and creating campaigns. I am frequently amused at the wit of my fingers on keyboards. Over the years marketing has always been my favorite part of owning my business. I have actually been pretty darn successful at it so it is probably a bit surprising that the second thing I did since my loan funding, after consolidating debt, was outsource my e-mail marketing. By hiring an email-marketing consultant I was able to leverage my strengths with follow thru. Since I am strong at marketing I felt that outsourcing the conception and implementation was an area that I would be able to easily monitor and direct. Since marketing makes my heart sing it was simpler to quickly assess what skills and qualities were in agreement with my vision. I feel blessed to now have the revenue to work with a marketing expert that will help take our product to an even higher level as well as assure that we don't fall behind because "I" am the only one who handles email marketing. Mitch Tarr of Zin Marketing has met my expectations at our every meeting and I can't wait to see the next evolution of vision and follow thru!

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