Page 82 - The UnCaptive Agent

PREREQUISITES FOR SUCCESS 55

about it, and create a note with repayment terms and
interest. The note should be made in the name of your
business even though your loan lenders may require you
to personally guarantee it.
If you have a good relationship with a bank or a
banker, you may be able to borrow some of the money
that you need from a bank. However, banks generally
don’t like to make working capital loans to startup
businesses with no track record. You may be able to
borrow some of the money you are using to invest in
office equipment or other tangible assets. Generally,
you should be able to borrow about from fifty percent
to perhaps as high as seventy-five percent of the cost of
things like furniture and computer equipment purchased
for your business if you have an excellent credit rating.
By the way, do you know what your credit rating is?
You should look it up now, as it will be important not
only in borrowing money but getting insurance carriers
to appoint you. If your score isn’t above seven hundred,
you may need help from a Market Access Provider who
will need to vouch for you with carriers.
While you may not want to borrow money from a
bank at this point in your agency’s development, I do
recommend that you plan and develop a relationship
with an individual banker and not just the institution.
You will be opening an operating account (and depend-
ing on your state’s insurance laws, a trust account for
depositing premium received by the agency on behalf of
insurance companies) and depositing money regularly.
In fact, depending on the type of business you write,
these deposits can be substantial. This makes you an
important customer of the bank from the start as banks
need two things to make money themselves—deposits
and loans. As you set up your bank accounts, I suggest
you ask to meet an officer of the bank. Tell the officer