It's a fact that most business owners are not prepared for what most lenders in today's economy are expecting from them. This is my experience with small and mid-size business owners in Illinois who desire business loans and financing instruments for expenses, new inventory, equipment, making needed repairs or developing a marketing strategy.
Your dedication, loyalty and hard-work to your business isn't enough in the eye's of the lender when applying for a business loan. Like ones health, we can always say to others that we feel fine and we may look fine, but at the end of the day it's the doctors results from your annual physical which reflects the truth about your eating and exercising habits and inevitably your over all health.
Like your health, your business may not be performing the way you'd like it to, but it can if you get organized, know how it operates and know what things effect your lending opportunities and risk to investors. Your over all business growth and health is influenced by your ability to obtain financing even if or when the odds are stacked against you!
Here are some tips to consider as proof of what most lenders like to see to determine the risk you present to them when requesting a business loan or working capital, for purchasing inventory, equipment, or for doing repairs.
- Cash Flow verified by monthly transactions occurring in your businesses bank account and the number of NSF's (Non Sufficient Funds)
- 3 months of complete business bank statements and the current month from the previous year. Usually requiring minimum average ending balances between $3,000.00 to $5,000.00
- 3 months merchant processing statements. Usually requiring minimum average ending balances between $3,000.00 and $5,000.00
- Balances on loans made to your business by third parties.
- Landlord verification.
- Consumer and Business Credit Score. Let's just say the higher, the better! ( more on that to come and how you can get the best business loans and other financing available)
In my next article I will discuss the various business loan types available and why some are more appropriate over others for your business. Additionally I will outline what you can do to improve your credit score without ever having to pay one thin dime for this advice!
If your interested in a business loan for the purchase of new equipment, inventory, repairs, expenses, or even commercial real estate financing, you've come to the right place! I've been assisting consumers and business owners for over 7 years in obtaining the financing they need for their business growth and success. You must first acquire the knowledge about business financing. The next thing is to apply it relative to your business model and needs!
Earn a Gold Star in smart business lending and remember to look for future articles!
Fred Hochrein
