They say necessity is the mother of invention and in recent years in Puerto Rico, small new businesses or innovation in existing ones are proving it.
Movements or programs to encourage entrepreneurship are developing on the island with great success, but despite such initiatives, there are still people who do not know the processes required to establish their own business or raise capital for it.
To guide those who still have doubts about the requirements or characteristics of commercial finance, Jorge Garcia Noya, first vice president of the Commercial Credit Division of Popular, shares important advice for those who are still in the stage of getting the necessary funding to make their business idea or dream come true.
The approval of commercial financing will depend on the profile of each customer and various important factors. All these factors should be stated, as clearly as possible, in the business plan, which is a vital element in the implementation of any idea that may need funding.
What should a business plan include?
- A proven idea – Many successful businesses, inside and outside Puerto Rico, started out as a hobby. Selling biscuits, cookies, ‘sofrito’, to name a few, emerged within the home as a hobby or a way to make extra money. “The advocate of the idea has to like it, live it and believe in it. They need to tell their experience, “said the bank executive.
- Market knowledge -The location of the business and its competition are important and contribute to the success or failure of the business. “You need to ask, is there demand in the market for this product or service? Setting up a business where there is high demand and little competition is not the same as trying to sell a product or service in a saturated market,” Garcia Noya explains.
- A financial plan -As any well-planned goal, the credit application should include a financial plan with a breakdown of the initial investment required, projections and financial statements. “You must include at least six months of financial statements, although it would be advisable to include two years,” said the expert, who has spent six years directing the Division of Commercial Credit at Popular.
- Permits –Before operating a business, make sure you have all necessary permits and registrations.
Learn more about how to Develop a Successful Business Plan.
To apply for funding, establish a business for the first time, or make changes to an existing one, you need preparation and knowledge of what you want to accomplish with the product or service. “It is actually a simple process. The important thing is to believe in it,” Garcia Noya concluded.
For guidance on commercial financing or to apply for credit, visit popular.com/negocios/credito-comercial/ or go to our nearest branch.
We wish you success in your business!