Renzo Campanella has worked in the insurance industry his entire professional career, honing his skills with corporations like Humana, Allstate and Met Life.
He reached a crossroads in 2010 when a company he worked for began reducing agents.
“I had a couple of options,” he said. “I’ve always been intrigued by the military. I asked my wife which path I should take – the Navy or business ownership. She encouraged me to start my own company and believed in my abilities to make this work.”
Campanella signed his first business purchase agreement on February 15, 2011, and became the owner of Sunrise, Florida-based Allstar Assurance, a statewide multi-line property and casualty insurance agency providing customizable policies for businesses and individuals.
“Honestly, it was the best decision I ever made,” he said.
Starting his company came with financial challenges.
“I maxed out my credit cards and line of credit. I used all of my savings and hoped for the best,” he said. “The office was bringing in only $2,000 dollars a month and my rent was $2,000. It wasn’t easy.”
His business grew through referrals.
“We did very little marketing. Our strategy is that it’s all about the relationship you establish with the clients. If you’re able to develop and nurture trust, it goes a long way.”
Allstar Assurance has grown from 30 clients to over 3,000 clients since 2011 and Campanella has specific goals for the future: 8,000 clients in the next five years, and 20,000 clients in the next 10 years.
Campanella determined that he could fuel that growth with an infusion of capital. We share his story because there’s much to learn from it. For firm owners in similar situations and with similar growth trajectories, here are five steps to secure financial funding for your own small firm.
Build on your experience. Campanella knew the industry from the outset. He’d been with both successful firms and those going through hardship and layoffs. In starting anew after his own layoff, he created a company that played to his strengths – and he was able to grow it at breakneck speed thanks to referrals. This business performance and upward trajectory is important, as funding partners want to work with established and stable companies.
Research which funding options are right for you. Small businesses have numerous options when it comes to securing funding for their businesses. Beyond bank loans, there are credit cards or lines of credit, invoice factoring, or alternative loans. Each has its pros and cons, and businesses should research and weight these options based on their timeline, need and financial health. Campanella opted to pursue a Small Business Administration, or SBA, loan. With lower rates and longer terms than most options available to small business owners, SBA loans are often a preferred financing choice – but not all small businesses qualify, and the process can be longer and more labor-intensive than other options.
Find the right partner. Once a business owner has identified the type of financing they’re looking for, they should seek out the right partner for that money. For example, if one decides that a traditional bank loan is the best choice, partners might include local banks, national banks, online banks, or credit unions. Finding the right funding partner can sometimes mean going to multiple banks or credit unions. Instead, Campanella worked with SmartBiz Loans to facilitate his SBA loan. This online technology platform streamlines the SBA loan application process and offers a marketplace of preferred SBA lending banks that matches Campanella and other candidates with the bank most likely to approve their loan request. These marketplaces exist for other financing options, as well.
Keep organized. The process of applying for and securing financing can be daunting. Each potential lender will want a variety of financial statements and materials to assess the financial health and credit-worthiness of an applicant. Campanella has solid advice for other business owners: “Be patient and have all of your documents up-to-date,” he advises. “I’m extremely organized. We’re paperless and with a quick search, I was able to produce any requested paperwork.”
Clearly define the need – and tackle it. Most financing partners will consider different business and financial factors in order to determine an applicant’s approval or denial, and well as their risk – which will impact the total financing, interest and other terms. One factor financers assess is the business’ revenue trend, as well as how the business compares to their industry average. Business owners should be prepared to illustrate the business’ health, as well as how they will use this cash influx and the impact that ill have on business success. Campanella knew exactly what his money would go to -- and how it would help grow his business so he could responsibly make payments. He could point to his past growth and had clear goals for the future.
Campanella ultimately secured a low-interest, 10-year term SBA loan for $350,000. He’s immediately putting the loan proceeds to work, executing against his goals.
“We’ll be launching a campaign soon throughout the state with billboards, social media and magazines,” he said. “We currently have six on staff and plan to hire three more people."