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For many, acquiring a capital for their business is the surest path to realizing that dream - the American Dream of Financial Independence. Because lenders prefer to loan to businesses with established financial histories, loans through traditional lenders can be difficult for new businesses. In today’s market, it is extremely difficult to receive approval on your loan application. Whenever you turn on the news lately, it seems like there is always at least 1 new bank that is asking for the government to take over control and bail them out. It is no wonder banks are reluctant to lend, with all of this market volatility. It can be a very daunting process dealing with the business loan application itself as well as getting it approved for your business. According to a recent study, over 80% of small business loan applications are declined due to presentation alone! The good news is that, even in these times of tight credit, business capital is still available. Borrowers with good credit can still get approved for unsecured signature business lines of credit up to $250,000. If you are a borrower with really good credit you might not have to show financial statements like business tax returns, balance sheets and profit and loss statements. A loan with an interest only payment can be great for cash flow purposes. Roughly, your payment would calculate out to be $65 for every $10,000.00. Based on overall qualifications, the term can range from 1-5 years. As long as punctual payments are made, it is renewable every year, even after the initial term expires. Because the lender is in business to make money, keep in mind the lender only makes money if you keep borrowing as well as paying on time. No bank or lender wants to terminate relations with a customer who pays regularly and on time. These loans will not show up on your personal credit if structured properly! Proceeds can be used for expansion or to float the business during slow times. To ensure your application is approved the first time there is a simple process you need to follow. The first thing to look at is your credit history and how good it is. And if it is not very good, then you need to figure out how to improve your credit history. The minimum Fico score that will be accepted is 680. Most lenders use Experian score and the higher the score the higher the approved loan amount. At least 5 trade lines or creditors, called the "rule of 5", are included in credit guidelines. They must have been opened for a minimum of 5 years. You must own one or more credit cards with a credit limit which exceeds $10,000. You're good to go if you meet these guidelines. Regarding your credit, make sure that your employer information is correct. Your bank loan application must match your employer information such as name and address. Do this first, so as to avoid a lender's underwriter digging deeper into the credit file. In order to get a business loan your personal credit will be looked at. The more your credit is scrutinized, the more likely you will be denied for a loan. The next requirment is that you have owned a business for a minimum of two years. It does not matter if you are a sole-proprietor, corporation, limited liability, etc. In order to satisfy the 2 year seasoning requirement, existing businesses can be purchased. If this is the method of choice, kindly remember that ownership must be seasoned for ninety days before business lines of credit may be applied for. You can obtain more capital when the company begins to generate revenue. As long as you remain a good paying customer, the limits are endless. Credit line increase requests can occur every 6 months. Credit partners are also something you can use to your advantage. Almost every lender will require that you open some type of account with them. And they will expect this before they will approve your loan with them. This way they can set up automatic payment, which will be easier for the both of you. This lets them know that you want to develop a relationship with the bank. You will have access to more capital as you grow your relationship with each bank. Interest rates are based on what Wall Street Journal Prime rates are. There is always a few percent added to the prime rate.
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Capital Advisor Paul Chavez has over 10 years of experience specializing in assisting small business owners procure capital using unsecured, no documentation business. Try a no obligation, free consultation. Use our experience to your advantage and raise the business capital that you need. Come visit us at: www.candacapital.com/BLOC_20_Approval_20_Secrets_20_Revealed.html
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