What I Learned About Finances & Loans When Financing My Business
Blanca Plascencia owner of El Fogón Restaurants in West Des Moines and El Guacamole in Waukee, Iowa. Photo by Tatiana Peña / JEFAS Magazine
Discover essential insights on personal finances, credit, and loans to successfully manage your business in 2025. Learn how to secure funding and build credit.
By Blanca Plasencia, JEFAS Magazine
Understand Your Personal Finances
Understand your personal finances – that’s key! What do I mean? That sage advice from your grandparents: Don’t spend more than you have, don’t buy things you can’t afford. Nowadays with credit cards, you don’t have to wait, we have the power to buy what we want, when we want it. But, without knowing your personal numbers, debt can become a lifelong struggle and unnecessary stress. So, listen to your grandma and only buy those extras if you can actually afford it in your personal budget.
How I Manage My Credit and Budget
You need credit so it’s important to understand how it works. Here is what I do:
When I get a paycheck, I deposit it in my checking account. I track how much money is there. For example, if I have $1,000 in my checking account, I use my credit card (that gives me cash back rewards) for everything I need like gas, groceries, food, etc., but never exceed what I have in my checking account.
When I get my next paycheck, I deposit it in the same checking account. I keep using my credit card to pay for everything so I’m not disrupting my account. Two days before my credit card bill is due, I pay the whole balance – always, every month.
With this method, I earn a little cash from the credit card, NEVER pay interest, and I only spend what I have.
If you do this consistently, you’ll build credit history and a high credit score. This is necessary for good business management and to get a business loan. If you don’t understand the basics about personal finances, chances are that you might not be able to manage the finances of a business, so learn the personal first and be willing to stay within your budget.
Building a Strong Business Foundation
Once you have the basics, (hopefully some savings, and good personal credit history & score), you need a business plan. I looked for resources, mentors, SBA (Small Business Administration), SCORE, Latina Leadership Initiative, and whatever else would give me hope. I was completely OUT OF MY COMFORT ZONE. That assistance really helped me grow as a person.
Facing Rejection & Embracing Growth
After tons of interviews, appointments, and financial resources I was still hearing NO’s every time I applied for a loan. It was discouraging. I took an emotional intelligence course in Guadalajara. It helped so much! While working on my business plan I met my mentor through SCORE. He is a retired banker named David Ogburn. He took one look at my business plan and slammed it on the desk saying, “Anyone can download a business plan off the Internet.” Ooh! The indignation! I had been working on that for three years! But he also gave me valuable advice. “As a banker, what interests me most is when and how you will pay back the money I lend you.”
That changed the focus of my business plan. His honesty was super helpful, and I am so grateful for his help. I understood that I had to work on myself. I had to become a person who believed she could manage money from a successful business so I could repay the loan.
Learning from My Mentors
Books, training courses, business classes, lots of YouTube videos, Google searches and especially time with my good friend and mentor, Kim Tarbox helped me grow. I am and will forever be grateful for all the time, meetings, and advice that lifted me up and showed me that it’s OK not to know! It’s OK not to understand! Not everyone knows everything. I had to be brave and humble enough to say, “I’m sorry but I don’t understand this, can you please explain it to me?” This simple phrase can make a huge difference in negotiations, and in life! Gracias Kim and Paul Tarbox for helping me, and for creating the logo for El Fogon! I am forever grateful to you!
Building Relationships with Bankers
Back to business. Once you have a business plan, it’s super important to have a relationship with bankers and lenders. To begin, where do you bank? Why do you bank there? What values do you share with your bank? What resources do they offer? Do you know anyone at the bank who greets you when you walk in? I didn’t have that. From my experience, it felt like most large banks didn’t care about the little people like me. Small community banks and credit unions were a better fit, especially those with resources in Spanish! That was important for me to make sure I understood everything. Have you ever been to a community event and seen a bank or credit union there, supporting a local sports team or cultural celebration? Get to know those people. Introduce yourself, learn their names and where they work, tell them about your business, start building a relationship with them. It doesn’t matter where you are in your entrepreneurial journey, they may be able to help, or know someone who can.
Key Financial Reports You Need to Understand
If you already have a business, it’s important to know the three most important financial reports: profit and loss, statement of cash flow, and balance sheet. There are excellent books about how to create, manage and analyze each of these reports to grow your business.
Once I had my business plan, took all the advice I could, created relationships with financers, and worked on my insecurities, I secured 2 SBA 7(a) loans that I paid off early. I had excellent credit, a strong financial foundation for my business and a great relationship with my lenders. It was the right time to go for my biggest loan ever. This was for a much larger project and the costs rose way higher than I anticipated. At first, I thought I could get a conventional loan, something between me and my bank. However, since the numbers kept growing, I did not have enough assets for the amount I needed. I went back to an SBA loan. But everything had changed! The bank now worked with a third-party vendor to handle SBA loans. IT WAS TERRIBLE! This is the most recent thing I learned about financing. If you are looking for a loan, and you don’t have enough assets to back up the funds, the SBA is a government agency that can help you with the financing. They don’t lend money, they are not banks, but they work with some banks to help you get approved (they can back up the loans).
The Challenges of Third-Party SBA Lenders
Many banks do different types of SBA loans for different purposes like startups or commercial property acquisition, and they are a great option for first-time and minority owned businesses. Check with your bank. If they work with a third-party company, the process can turn into a nightmare. Oftentimes the third-party vendor prepares the paperwork almost as if it is for an audit and the process can take longer than 6 months. But don’t give up! There is always a way if you have a strong business plan that includes details around when and how you can repay the loan. You can get financed, but it is a better experience if the banks process their own loans instead of using third-party companies.
Also, shop local and never give up!!!
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