What Lenders Look For From You

What Lenders Look For From You

The Six C’s of lending:

Credit- Ok FICO score (620+), no bankruptcies, no late mortgage payments, no liens, etc
Collateral- Real Estate equity, Machinery, Equipment (Hard Fixed Assets only)
Character- Is business owner experienced in viagra industry? Any management experience?
Cash Flow- Does client have ability to repay loan. Current P&L, Balance Sheet, Tax returns (w/profit, not loss) Startups need business plan& financial projections
Capacity- Does client have the ability to take on new loan payments & pay existing debt currently
Capital- How much has client invested in the business up to this point?   Startups need 10%-30% capital injection (skin in the game) No 100% financing available

 

Information about loan requests you should know

First of all you viagra be realistic. Look at your request from a lenders view. Lenders are in the business of making safe, sound, secure loans that they can profit from….period! Lenders are not in business to make your dreams come true. They do not participate in high risk propositions!

There are numerous criteria a lending institution utilizes in making a positive funding decision. Some of them include length of time in business, business profitability, business cash flow, business assets, personal collateral, industry type, owners experience in the industry and many more.

Remember all lending institutions have preferred industries and industries they perceive as high risk. If your business is in an industry they perceive as high risk, like real estate, you will have a difficult time obtaining financing. If it is a real estate purchase, the equity in the property and the profitability of the deal will be considered. But if there is Real Estate purchases involved, there are no 100% financing options anymore. You must have a down payment, “skin in the game”. If you are not willing to take even $1 dollars worth of risk, why would a lending source? The answer is they will not. Don’t ask.

The profitability in your business indicates the capacity to repay the loan or business line of credit you are seeking. Obviously your business must have the ability to repay back the entire loan amount approved (service the debt). Good revenue, cash flow and profitability are essential in getting a positive application decision. They do not look at what is “going to happen” once you get financed. Lenders look at your situation now and can you make the payments of the new loan request plus your current obligations.

The loan amount requested and the reason on a loan application must make sense to a lending institution. Asking for an amount higher than can clearly be paid back without difficulty is a red flag that a business is struggling. As a general rule, the most that can be expected from a traditional lending source is 20% of gross sales revenues. Never expect a loan amount equal to or larger than your gross annual sales, it just doesn’t happen! You cannot have Net Profits of $20,000 per year and ask for $250,000. You cannot possibly service that debt.

The reason for a loan is also very important. Lenders like to fund businesses looking to expand, acquire equipment, acquire property with equity, increase marketing or anything to do with growth! Lenders do not like to provide their capital to a business struggling and seeking debt consolidation, payroll assistance, tax help or legal financing.

To get a positive loan application decision your business must be properly prepared and you must be qualified! If you are not qualified for a loan, no one can help you! If your business does not have the capacity to pay back the loan itself, you will be looked at personally as the business owner. In fact they may look at you anyway to see if there are any tax liens, judgments or mortgage late payments. Don’t believe they won’t. Lending money is a risk.

If you have bad personal credit (sub 635 FICO score) in today’s lending environment, it is going to be very difficult to obtain financing. People with less than 550 FICO scores eliminate 90% of lending options, even from Alternative Finance companies. If you have bad personal credit, fix it now with the help of professionals then apply. And if you have bad personal credit and a non-cash flowing business, why would you be applying at this time with no ability to service the debt?

If we are approaching a “Private Investor” source, and you have bad personal credit, no collateral and a non-cash flowing business, you absolutely must have a professional business plan created. You cannot do this on your own. And that business plan better show an amazing return on investment for the investor in a short time frame. Remember, lenders are in the business of making safe, sound, secure loans that they can profit from….period!

Remember, you must be realistic!

The good news is: If you are qualified we can help you get funded.

Striving For Success

The most commonly neglected area by a small business owner is the appearance of the business. The first thing they focus on is getting the service or product in ready for sale. They open their doors and immediately are looking for customers. The product or service is obviously vital to the business’ success but there are steps needed to be taken in order to give a great impression to  potential customers.

1.Get a website
A website gives the opportunity for potential customers to get an overlook on the business. The website can be simple, but it needs to have enough information and advertisement to excite visitors. For instance, have your logo and pitch up to be remembered. Customer reviews could be posted to show that your business is satisfying. An “about us” section can tell your story of how you began and what you do for your customers. Make sure your contact information is front and center. You would be surprised how many customers come from the impression made on even a small website.

2.Business e-mail address?

Your personal e-mail should be completely separate from the e-mail you use for business. Your company’s e-mail should always be affiliated with your website. A better impression is made when a business’ e-mail ends in “@silverstatefundingservices.com” for example rather than “@ yahoo.com”. It is inexpensive and often free in conjunction with a website layout.

3.Phone System
Having a reliable business phone is an asset. Make sure that your line is an actual “business phone” line. You’ll need to list it with 411 directories and all online resources. How you answer the phone makes a critical impression. “Thank you for calling (business name) how may I assist you?” would be an appropriate way to answer. Treat your customers on the phone, as you would like to be treated while calling a business. Putting them on hold for too long or being directed to the wrong line leaves them aggravated. Make sure to have a system in place to make sure all calls are handled appropriately.

4.Spell check everything
Although you may be able to type 70 words per minute your brain may not work at the same speed. Typos are inevitable but need to be caught. Correct spelling puts off a professional tone when communicating with customers. It is easy to have an automatic spell check set to what you are writing. It may take a few more minutes to create an e-mail but it is worth the impression.

Here’s a surprise:

The 4 steps above will leave a great impression with standing customers. But, most credit vendors (banks, credit unions, leasing companies, etc), also check each of these items before granting credit. In this economy credit lenders are more cautious than ever. They go through many steps to verify that it’s a real company. A real company is dressed for success.

At Silver State Funding Services, we have a track record of producing for our clients. We have experienced Certified Cash Flow Consultants and Trained SBA Consultants on staff to serve you. That’s right! We have real experts in financing in house! None of our competitors can say that.

We are associate members of NAGGL (National Association of Government Guaranteed Lenders) and members of the American Cash Flow Association. Our financing experts have well established working relationships with traditional banks, SBA lenders, private investment firms, venture capital firms, and 50+ alternative financing lenders to fund you.  Let us get you the capital your business is looking for.

Attracting Investors

When I ask an entrepreneur what their biggest hurdle is the answer is overwhelmingly “money”. It never fails.

Let me start by making an outrageous statement: Getting money is never a problem.

Once you have done the work to ensure your business has the tools to be successful, you won’t have problems finding money to grow your business. Let me start by explaining some of the basics every entrepreneur should address and have ready before seeking investors or loans to fund their business.

1. Is your business in compliance with your state?
Have you obtained all of the necessary licenses needed to do business? Have you filed all of the appropriate paperwork with your Secretary of State? If not, your local and state governments don’t even recognize you as a legitimate business. How do you think an investor would feel? – disk defragmenter

2. Have you done the basics to make sure your business is in compliance with the lending markets?
In today’s credit market, vendors are closely examining each business before granting them credit. Remember, Silver State Funding Services can not only ensure your business is attractive to vendors/lendors, we can ensure you’ll have the exposure with them to get you lines of credit.

3. Who’s on your team?
Before hunting for investment, you need to ensure you have selected the team that will make this business prosper. True leaders surround themselves with people smarter than they are. You want a financial expert, operations expert and marketing expert on your team as a minimum. Have them write bio’s and resumes. This will be one of the first things an investor looks for.

4. Do you have a business plan?
Every business owner needs to have a business plan. There’s no excuse not to. You can hire someone to do the plan for you, or write it yourself. The business plan also needs to clearly address how much funding you will need to bring your offerings to market and fund the business through cash flow positive. However, you can also put together a more informal plan that will outline your operations and your financial goals for your business. This is called an “operational plan”. Every business needs an ops plan and it should be updated every month.

5. Have you done market analysis?
You need to research your target market to ensure your product fits an established need. During the research, you’ll most likely discover you need to tweak your product and your approach to market it to better fit your target market. You need to offer something that addresses a recognized need for your customers. Market research not only helps you discover that need, but also determine how big the market is. This is where a professional business plan can help.

6. Prove it works!
One of the biggest fears investors have is investing in a business that hasn’t proven its products or services. Money is tight early on, but you need to do a test of your offering. Go sign up some customers on a small basis and prove your business model is a winner. When you sit down with potential investors, you will receive a much warmer response if you’ve already documented sales and prove there is a desire for your offering. You also will most likely have to give up a smaller percentage of your business when bringing in an investor because they will see less risk in the venture.

If you have addressed the issues above, you stand a much better chance at getting funding. The idea is to show the lender or investor that you truly understand the landscape your business is operating in.

Before looking for investors, make sure all 6 items are met. Having this work done before meeting with an investor shows you not only understand your business, but have the foresight to understand the challenges it will face.

Credit Card Factoring- Business Financing in 5-7 Days

One of the best ways to obtain working capital for small business is also one of the least known. It’s called credit card factoring. Credit card factoring is a very unique solution for those who need a quick infusion of cash.

Every small business needs capital at some point. Small business loans are getting harder and harder to get from traditional lenders. In fact banks decline over 90% of all small business loan requests for various reasons including insufficient time in business, no collateral and less than perfect credit.

Credit card factoring utilizes an asset that is unrecognized by traditional financial institutions — a steady stream of credit card sales — to determine the financial viability of a business. Capital advances are based solely on the company’s future credit card sales. A Credit card factoring funding for your business may be just what you’ve been looking for.

According to the latest statistics from Equifax, there are more than 6 million small businesses in the US. A high percentage of those small business owners are digging into personal savings, taking out home equity loans, borrowing from family and friends and running up credit card bills as forms of financing.

Credit card factoring companies can help small business owners avoid these financial black holes through purchasing a fixed amount of the businesses future credit card sales, at a small discount, and in turn, providing them with a lump sum of working capital. – Max fix

Credit card factoring cash advances typically varies from $5,000 to $1,000,000. Small businesses will frequently benefit from converting future cash flow into immediate working capital.

The most likely candidates to benefit from this strategy are restaurants, bars, service businesses and retail stores. These loans can be used for expansion, buying out a partner, advertising, payroll, emergencies, anything related to business.

Credit card factoring companies work with both established and expanding businesses to provide working capital to companies in the small-to-medium-sized range who have difficulty securing funding from traditional financial institutions or prefer a funding option that aligns with their cash flow. Working capital can be in the hands of the business owner in 7-10 days.