Jeff Dick
President and CEO
MainStreet Bank

As graduation announcements pour in, May has all of us here at MainStreet Bank thinking about the next generation.

It’s amazing how many young people hope to start a business.  But with tighter credit requirements, getting the money to launch new ventures can take a little creativity. 

Even existing businesses are finding it harder to obtain financing in the current environment. That’s why this issue of our newsletter takes a look at lending options and offers advice from our Chief Lending Officer, Drew Brown.  Plus, you’ll meet Martin McClarnon, one of our new lending officers. 

You know, years back I watched a lender at a bank steer my uncle into types of loans and terms that nearly cost him his business. That didn’t have to happen. And that’s why I’m personally committed to making sure MainStreet Bank structures the right loan product for every customer.  

Whether you’re thinking about a loan to finance a car or provide working capital for a business, I hope you find our “lending” issue helpful.  And to all the grads – and to their proud Moms and Dads – congratulations and best wishes for the future!   Feedback@mstreetbank.com

Meet MainStreet

Having grown up in the community, Martin McClarnon is very familiar with area banks.  And, Martin had always heard good things about MainStreet Bank. He knew MainStreet's reputation for building long-term relationships with customers. So, when he decided to expand his career as a lender, Martin gave MainStreet a call.    

Martin spent five years with other banks, working as a commercial real estate lender.  “But with those banks,” he notes, “a lender who does real estate only does real estate.” Martin wanted to do more with his career — and more for the small businesses in the community.  So, he called Chief Lending Officer Drew Brown and asked to join the MainStreet team.  

“It’s great to be on board,” Martin says. “Now, instead of just making a transaction and never seeing someone again, I really get to know our customers and their businesses.  I can really make a difference with everything from real estate down to short-term cash flow loans. And because I see the full operation, I can find loan products that are absolutely right for each customer’s immediate needs and long-range goals.” 

Martin lives here in Herndon where he loves the area’s abundance of outdoor activities — especially golf!  He prides himself on being available to customers at any time, so if there’s anything he can help you with, give him a call at (703) 481-4571.

Creative Solutions - When conventional loans leave questions, MainStreet Bank finds answers

Every small business needs a “Loan Portfolio.” Like an investment portfolio, a loan portfolio gives businesses peace of mind and helps them grow.

Depending on the type of business, that portfolio might include loans to finance real estate, working capital lines of credit for ongoing or seasonal needs, and loans to finance equipment.   

Finding a lender:  MainStreet Bank is a full service commercial and consumer lender. “What that means,” says Chief Lending Officer Drew Brown, “is that we have all the programs small and mid-sized companies need — including personal loans for business owners and their employees.” 

Drew also points out that because MainStreet’s loan committee is right here, they can usually process completed loan requests in under two weeks. “That’s a big difference from banks where it takes two weeks just to get the loan document into underwriting.  And that makes a big difference in getting people the money they need when they need it.”

How to look good to lenders:  Large, chain banks may know nothing about you or your company: they just look at the balance sheet.  At MainStreet, it’s different.

Because we’re a community bank, we’re free to examine every loan application on a case-by-case basis. Of course we look very hard at profitability, but we also like to see earnings being retained to create worth in the company. 

 In addition to adequate capital and a good credit experience, we look for solid industry experience. “Our strength,” adds Drew, “is in really getting to know our customers and their businesses. That’s why we may decide to make a loan that another bank can’t.” 

Where MainStreet’s creativity makes the difference:  Drew offers this example: “A company has only been in business a few years. They’re just starting to make it, they’ve got a good plan.  Making a strategic acquisition would fast-track success, but the company doesn’t have the cash flow to handle the three- to five-year terms required by conventional loans.

A MainStreet lender might then look into whether a Small Business Administration guarantee would make a difference — adding strength to the application and allowing the company to afford repayment over seven years. 

Know all the options:  It pays to have a strong relationship with a lender who really knows your business and the lending options available. For example: 

• Instead of traditional commercial real estate loans that usually require 20-25% down, MainStreet may be able to offer you a rock-solid program requiring HALF that.
• If you need to meet payroll, but receivables won’t flow in for over a month, MainStreet has a short-term loan program that can cover your cash-flow gap. 
• If you want to buy equipment — and take advantage of hefty tax savings available to businesses as part of the bonus depreciation provisions in the 2008 economic stimulus package — MainStreet can help you find the right type of loan and the right terms.

 

If you’d like to discuss your own business goals and financing options – or just want to congratulate Drew on his son’s high school graduation – just give MainStreet Bank a call at (703) 481-4567.

StreetSmart - Increase your referrals … Use ACH to offer customers extra services … Save gas with remote cash deposits

Boost your business referrals. Research shows 65% of customer referrals result not just in leads but in customers. Plus, sales generated through referrals tend to be larger. Here’s a quick idea you can use to rev up your own referral business. 

Create a thank-you flyer that asks for a referral. One of our MainStreet Bank customers suggested this idea, and it’s a winner – especially for folks for who feel uncomfortable calling or asking face-to-face for a referral.

  - Our customer says he has used this tactic long enough to know that he gets about two referrals for every 10 flyers he circulates.  He runs a local service business and simply includes this small flyer in his billing statements. 

If you run a retail business, a flyer would work just as well slipped into the bag with the purchase. Manufacturers could slip a flyer in with the product packaging. Restaurants could tuck a flyer in with the check. What does the flyer say?  Your flyer should reflect your own unique business, but here’s a general idea of what to include:  

• Thank customers for their business
•  Ask for a referral (always ask for contact information and assure your customer that it will be kept private and used only by you to follow up) 
• Say how you’ll follow up: for example, you might explain that you’ll send a note offering a discount. 

 By the way, we at MainStreet Bank love referrals, too!  And we’d like to take this opportunity to thank those of you who graciously recommend us to your friends and associates for their loan and deposit needs.  We’re delighted to have this opportunity to grow — and to help your business associates grow - too. 

Use ACH to offer customers extra services.
An Automated Clearinghouse account with MainStreet makes it easier to collect payments and get a new competitive edge.

With an ACH account, you automatically debit customers’ bank accounts for recurring payments. From health clubs to tutors, therapists, and child-care providers, ACH ends the hassle of having to ask for payment each month.   No more “the check is in the mail.” Plus, by linking your ACH account to a merchant account, you give customers the convenient option of having recurring charges billed directly to their credit card.  Call our support line at (703) 481.4589 to learn more about ACH.

Save gas with remote check deposits.
No more trips to the bank! Now, enjoy direct deposit right from your office. It’s safer, easier, and greener, too, since you won’t be driving to the bank!  

MainStreet can “Put Our Bank in Your Office” not only to remotely deposit checks but to give you full cash management, ACH, wire transfers - virtually everything you can do in a bank branch.  We can even enable you to remotely deposit cash. 

Convenience is just part of the story! One of our customers uses this cash management solution even though they’re just two doors down from MainStreet.  For starters, it’s safer than sending employees down the street carrying money. Plus, MainStreet makes it easy to transfer data directly to QuickBooks.  The customer can pull up checks quickly, which makes tax time easier, too.

MainStreet Answers

Q. My daughter is going away to school this fall and we’re trying to plan ahead for her financial needs.  Any ideas?

A. Online banking is a great solution.  Here at MainStreet, you can open a free checking account for your daughter.  Just get her a debit card and a starter pack of checks.  List yourself as a signer on the account and add the account to your own online banking view.  Sign her up for overdraft protection and she can start creating her own credit history.  With this account, you can automatically transfer funds into her account when she needs them - with the click of a mouse.  It’s not just easier, it’s smarter, too – because you can see exactly where she is spending her money.  

MainStreet Outlook

The Fed recently lowered the discount rate another quarter percent and gave some indication that they are done meddling for now.  A positive message?  When I decided to write this column, I didn’t think that the message each month would be so dreary. 

The country still has problems with liquidity, the residential mortgage market, high gas prices and a weak currency.  The only thing economists can’t seem to agree on is whether we are in a recession yet.   

In spite of the dreary message, the good news is that business is still strong in Northern Virginia and the surrounding Metropolitan area.  Our lending team is as busy as ever, and the opportunities that we are looking at are solid.  Our deposit team also continues to bring in excellent customers.  

Perhaps the takeaway this month is that good people can do well in questionable economic times.   

 

I’m still optimistic about a brighter second half.