How To Apply For Business Funding…And get Approved

Business Owners have had a wild ride the last 6 to 12 month dealing with Covid-19 along with trying to figure out what government programs they qualify for and how to find a CPA that will be able to help them since there are so many fly by night Tax Preparers.

Applying for funding can be really confusing because to start with there are alot of different types of funding. From cash advances that have changed drastically to be more customer friendly, to the Business Credit Card Funding With Zero % interest rates and no annual fee, there are definatly Loan options for the good, bad, and ugly Credit. But what do you qualify for and what do you want to avoid?

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We believe there is a formula to finding the correct type of funding for your type of business, and then a recipe, that could go well in any financial cook book, that is if combined correctly. If done the correct way you can set your business up for years of future funding. Taking the stress out of any high dollar project that comes along in the future. It could all boil down to that 1 simple letter we all know and love “C” 3 of them.

The first part of getting business credit established is to know that you can start things at the same time. Business credit what ever you call it is business credit. If your getting business credit cards or business term loans, Dun & Bradstreet can make things much easier. And getting other forms of credit such as vendor accounts you can be helped by a program called Credit Builder Plus. This product among many others will help you establish business credit.

THE WHERE AND HOW OF IT ALL

Business Owners have had a wild ride the last 6 to 12 month dealing with Covid-19 along with trying to figure out what government programs they qualify for and how to find a CPA that will be able to help them since there are so many fly by night Tax Preparers.

Applying for funding can be really confusing because to start with there are a lot of different types of funding. From cash advances that have changed drastically to be more customer friendly, to the Business Credit Card Funding With Zero % interest rates and no annual fee, there are defiantly Loan options for the good, bad, and ugly Credit. But what do you qualify for and what do you want to avoid?

,. .

We believe there is a formula to finding the correct type of funding for your type of business, and then a recipe, that could go well in any financial cook book, that is if combined correctly. If done the correct way you can set your business up for years of future funding. Taking the stress out of any high dollar project that comes along in the future. It could all boil down to that 1 simple letter we all know and love “C” 3 of them.

The 3 C’s Refers to something I learned a long time ago in the Mortgage world And it can break down the fundamental rule when it comes to a borrower getting a loan approved :

Do they have CASH, CREDIT, OR COLLATERAL. When buying a Home you need all 3 but business funding usually 1 or 2 will do the job.

If you have cash it means how much cash is your business bringing in Depending on how much capital your looking for banks want to see a consistent cash flow of at least 10,000 and if they can establish that minimum with other compensating factors such as time in business and industry the business is in, they will tend to lend that amount maybe a little higher

Credit we all know about credit and getting an unsecured business loan might require a higher score then buying a House. Why? because A Home loan has built in collateral, the Home. If you miss payments on a home loan after a period of time they just foreclose on your house. That is usually good enough reason to keep making payments. An unsecured business loan is more of a risk because when times are tough and a business slows down what are the bills they pay last? the bills that don’t have collateral attached. A business owner is much more likely to pay the house and car payments before a business loan. This is why a credit score of 660 at worst to 720 or higher is where they want to see your credit scores when getting a good business loan. I say good business loan because there are cash advance loans and some alternative financing that only looks at the revenue of a business and not the credit. Theses loans are important and serve a purpose but can be more difficult to pay if you don’t budget well.

Collateral, we all know what that is but what can we use for business collateral a copier? a few desks? No when it comes to collateral real estate or Real property such as a paid off car can do it. Sometimes if it is an investor they may want a percentage of the business until paid off (think the show Shark Tank) Another form of collateral can be life insurance. Most people are not aware that a policy called a key person policy can be used for collateral for a business loan but not all lenders will allow it. It is mostly used for SBA loans and other government lending

There many diferent aspecs of building business credit but as I have said for years that there is so much miss-information that yiu almost need to experience it for your self because every situation is different. The one constant thing is always change but for building your business credit remember a few things: You should always monitor your personal credit because it is going to be looked at. For start up companys, always because there is nothing else to look at. For established businesses unless you are 5 years old or older they consider you a new company. As far as “no pg” or No Personal Guarantee loans of any kind I will say that there are some Dell, Amazon Prime 30 and 60 day net acounts and a hand full of others but if you are counting on setting up your business and getting credit right away its a chalange and the best way I have seen to get business credit fast is by getting business credit cards. Yes they are personally guaranteed but they wont report on your personal credit which can keep your debt down. Also starting a business can be expensive and walking in to a bank or calling a funding company and saying I need a business loan but I have no credit or cash but I need 100 grand for my business will always trigger this question… do you have a business plan as to what your going to do with it, or how long have you been in business and how long you have had a business bank account, or what industry are you in? if you havent done your homework you will not answer correctly and be told you cant be helped. Go in prepared look up a few things about the industry your in and make sure you have an idea of what banks are looking for to approve your business.

Assure Business Credit LLC can offer you information on what the banks want to see and we can handle it for you, or educate you on what is needed. We sugjest let the professionals take care of it for you. In the long run you will probably get much more credit then you would going at it alone and with none of the stress attached to it. Call or text us anytime at: (314) 218-8898 or if you got to this blog post online but not from our website Visit us here https://assurebusinesscredit.com/ and for all of our pricing and product visit our member only page at https://assurebusinesscredit.com/members-only-area/

BUSINESS FUNDING CAN BE FRUSTRATING UNLESS YOU KNOW HOW TO APPLY

Then you are not alone. Many business owners have been frustrated because of many reasons but mostly the reasons that keep most business owners from getting funded has more to do with how and with who they apply with.

The fact is banks are not lending high limit term loans right now. Covid-19 is the major culprit for why not. What banks are doing is allowing retail funding companies to underwrite loans to their guidelines and then depending on the market buy them from investors and bankers as long as the timing and market is correct.

Most of the general public either knows, or learns the hard way, that big banks are looking for a very specific customer. Great credit scores, high bank ratings, and a very obvious good history of paying large payments on high limit loans and credit cards. For example if you have 5 total accounts on your credit and 2 of them are $1000 limit credit cards 1 is a $499 charge card to Target, and 1 is a retail clothing store card of 800 your going to have a really difficult time getting approved for a $150,000 business term loan. Adding high Authorized User trade-lines in this case may also not matter because looking at the average limit of what is primary, it wouldn’t make sense.

What would make sense is adding an average size primary tradeline of a term loan of $20,000 to $25,000 and an Auto Loan primary because there is not currently an Auto Loan on the credit. As long as the primary trade-lines are aged enough, this should give the file a high enough credit score and credit profile to get approved. To be on the safe side you could even add a small revolving primary to make sure there is enough accounts as most lenders want to see 3 primary trade-lines older than 2 years and over at least $5,000.

When applying for business funding you also want as few inquiries as possible. Ideally you want zero but having 2-3 per report is ok.

If you are Looking for Aged Primary trade-lines contact Assure Business Credit LLC at (314) 218-8898, email brian@assurebcf.com

Brian Steen
Brian Steen

Brian is the CEO of Assure Business Credit and offers a number of credit products and funding solutions. For more information go to www.assurebusinesscredit.com or call at (314) 218-8898 or email at:
brian@assurebcf.com


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