It's probably the most frustrating thing a business owner can experience. They've created the perfect product or service, worked hard spreading the word about their business, worked long, long hours,
sacrificed family and personal fun time and finally....they have the "big order"...
...But the client won't pay a deposit, and may even want more time to pay after delivery. The thought is to tell them to "pound sand" has crossed their mind, but payment on this order would change their life, and take the business to the next level...not to mention
open doors to future orders.
This cash injection would solve everything, so they apply for a business loan...and get declined over and over again -- never really understanding why-- losing the big sale, and credibility along with it.
The angered buyer feels betrayed, writes bad reviews all over the internet and the business must close.
All because the business owner failed to have the knowledge of the business lending industry...the panache of knowing what lenders want to see. The first step?
1) Open ONE Business Checking account with a well known brick and mortar bank.
Do not open a second one. It "waters down" your ability to borrow.
Do not open an "online only" account...Put every penny you can muster into it, keep depositing as much as possible, as often as possible. Do this for three months.
Be sure to sign up for paperless statements.
(Although perhaps good for the environment, this is not why we suggest it...you'll be able to download your pdf statements monthly in seconds.)
...Okay, you have your account established.
Second step: Forget selfishly thinking about what you want from a lender.
2) Think about what lenders
want from you.
Lenders want to see stability and predictability. That means many things.
Pay close attention to these keys:
-Have consistent or increasing deposits month over month...endeavor to never decline.
Do not take your vacation if you plan on getting funding within three months afterwards.
-Make many "true" (cash or check or ACH "in") deposits...(not "transfers in" from a Personal Account).
-Have few to no "returns".
-Have few to no "credit card chargebacks".
-Have few to no "negative days".
-Have high ADBs (Average Daily Balances) - keep money in the bank as long as possible.
3) Disclose "skeletons" to your Broker.
If you have "skeletons in your closet", such as a criminal background, missed Child Support payments, IRS or State Tax lien(s), Bankruptcy, prior business loan default, pending lawsuit, etc.,... first off get yourself an experienced Broker with many lenders, to cover all your bases.
(Use a Broker like A1 Financial USA, who has the nation's most lenders, --909-- each with a different specialty, each with different "allowances".
For example: some lenders care about Child Support but not tax liens, some care about tax liens but not defaults, etc. The combinations are endless, save time and heartache, work with the obvious choice Broker first...
...and disclose all of them to your Broker.
Your Broker is like your Doctor, reveal all the "pains". We're not here to judge, we're here to help you get the money you need...Be 100%
honest. Hiding things is only hurting yourself.)
4) Keep current on your rent and with your Secretary of State (S.O.S.)
You might have done numbers 1 through 3 flawlessly, have increasing numbers and ready to expand....but you forgot to pay your Annual
LLC dues to your state, that will get you declined 95% of the time. Also keep your landlord and/or mortgage current, that could bite you as well if more than 30 days late.
Here's a few minor ones, but critical nonetheless:
5) Be sure your DL/State I.D. is current
6) Be sure you apply with correct ownership % according to your S.O.S.
7) Tell your Broker why you need the money...(must be a pure business reason,
if not, let your Broker know so they can use the right lender).
8) Never go to a single lender over a Broker.
You'll limit your offers to just 1, instead of the best 3 out of 909, as with A1 Financial USA.
9) Complete your application fully
Leave nothing out, BE COOPERATIVE and submit all the paperwork your Broker needs without delay. Your Broker is not trying to be
difficult, he's trying to help you get your money as quickly as possible.
10) Don't procrastinate.
You need the money, right?
Take care of it now...right now.
The longer you take, the longer it will take to show in your account.