SBA’s 2008 Financial Services Champion Offers Advice on Avoiding the
5 Most Common Mistakes New Entrepreneurs Make When Seeking Financing

Contact: Barbara Fornasiero 248.651.7536; cell 586.817.9414; barbara@eafocus.com 

Huntington Woods, Mich.,---July 22, 2008---Mike Semanco, President of Hennessey Capital and the 2008 Michigan SBA Financial Services Champion of the Year, is seeing more downsized employees pursue their entrepreneurial dreams. But he cautions that would-be entrepreneurs set themselves up for failure if they don’t do their homework prior to meeting with a business lender or investor.

Mr. Semanco explains the five most common mistakes entrepreneurs make when applying for a business loan and offers solutions to avoid them

1. A lack of documented research on the need for a specific product or service. “It’s critical to the lender’s decision-making process to have detailed research that accurately identifies an industry or consumer segment that will be receptive to the product or service,” says Semanco. “Everyone can benefit from my product” is not a market strategy.
   
   
2. Unwillingness to assume a financial risk. “A business borrower has to show he has invested his own money, and perhaps that of family and friends, to get his product or service to the point where a business loan is needed. If the borrower won’t assume the risk, a lender won’t either.”
   
   
3. Inexperience with the product or service. “Even if an entrepreneur is pitching a completely new product or service, she should have some experience-based connection with it. While there may be exceptions, a lender generally wants to know the business loan will be used for something that links with the borrower’s work or educational background.”
   
   
4. A bogged down business plan. “Lenders want a relatively brief, easy to read plan that answers the who, what, when, where, why and how of the product or service. “Lenders and investors do not have time to review 50 page business plans. A succinct executive summary that describes what you are trying to accomplish, along with realistic financial information, will be enough to get the lender interested.”
   
   
5. An overall lack of professionalism. “Prospective borrowers need to look the part of a successful business person,” informs Semanco. “Current, professional dress is important, as is a positive attitude and glowing references. Borrowers who have a chip on their shoulder from a previous business venture or employer will convey that message to prospective clients or customers and potentially put the business at risk. An experienced lender looks at a borrower’s character, attitude and professional appearance as factors that help determine whether to deny or extend credit.”

Hennessey Capital (www.hennesseycap.com) provides innovative working capital solutions for growing business-to-business companies that are either pre-bankable but post-revenue, in transition or otherwise do not meet the credit guidelines of traditional bank lending. Products and services include purchase order financing, factoring, asset-based lending programs, mezzanine debt, receivables management and business coaching. Hennessey Capital is part of the Hennessey Group of companies including Hennessey Enterprises, Hennessey Ventures, Hennessey Capital Southeast, and InStream Services.

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