The best way to realize the American Dream of financial independence is, for many, to acquire capital for their business. 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 grows ever more difficult to obtain loan approval for the business capital you require. Whenever you turn on the news lately, it seems like there is always at least 1-2 new banks 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 intimidating to go through the business loan application process. According to a recent study, over 80% of small business loan applications are declined due to packaging and 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. Financial, such as balance sheets, business tax returns, profit and loss statements, etc., may not be needed to obtain these lines if the borrower has good credit.
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. Even when the original term ends, you will able to renew the loan yearly assuming you have made all your payments as required. 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. A lender or a bank has no reason to terminate a relationship as long as you are a good paying customer.
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. In order to ensure that your application is initially approved, you must follow some simple procedures.
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 the Experian or Transunion 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 all set if you meet these guidelines.
Regarding your credit, make sure that your employer information is correct. It is imperative that information regarding your employer, such as name and address, agree with the information contained within your bank loan application. 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.
You must be a business owner for a minimum of two years before you can complete the next step. It does not make a difference if the business entity is a sole-Proprietorship, Corporation, Limited Liability Company, etc. In order to satisfy the 2 year seasoning requirement, existing businesses can be purchased. If this is the method of choice, remember that ownership must be seasoned for ninety days before business lines of credit may be applied for.
As the business produces more profits, you will be allowed to attain more capital. As long as you remain a good paying customer, the limits are endless. Increases to your credit line can be requested 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 indicates to the bank that you want to do business with them.
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, usually anywhere from 1% to 3.5%, added to the Prime Rate.
Working with small business owners, Paul Chavez has spent 10 years helping owners like yourself obtain capital through unsecured loans. Try a no obligation, free consultation. Use our experience to your advantage and raise the business capital that you need. Come visit us at: http://www.candacapital.com/BLOC_20_Approval_20_Secrets_20_Revealed.html
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