How to Obtain a Small Business Bank Loan

Getting your first Business Bank Loan can seem like an impossible task. The majority of the small business bank loan applications get declined because banks won't lend to just anybody ... or will they?

Having a Business Bank Loan can provide a powerful boost to building business credit fast. This bank loan must be set up correctly and report to the appropriate business credit agencies.

So how do we accomplish this? Under this Small Business Bank Loan Program, you will be securing a business loan with a certificate of deposit (CD) at the bank that is extending the business bank loan. You'll make a deposit into a CD account at one of our preferred lending banks (or one of your choice if you prefer if they provide this type of loan). Then, you receive a business loan for 100% of the value of the CD. The purpose of this loan will be to build your business credit scores.

This process works very well and works every time as long as your personal credit is at least ok. The bank is not basing your business bank loan on your personal credit, but if your FICO scores are in the low 500 range they may not do this deal for you.

So where does your deposit come from? We are not talking about a very large amount of money. You can start with as little as $5,000. There are many creative ways to acquire the money you need for the business bank CD deposit: family, friends, savings, garage sales, or from any of our other creative funding programs. Another option is to build a 'savings account' while building business credit.

The Features of a Secured Small Business Bank Loan

- It will appear on your business credit report just like any other small business bank loan.
- There will be no note in your file, or on your business credit reports, that show it as "secured".
- It will make your business credit report stand out to other lenders and creditors who obviously know how difficult it is to get a business bank loan

A Helpful Suggestion

If you have to borrow the money you need for this step from friends or family, you can assure them that they will get their money back. Here is how that works:

-You borrow the money for the CD to secure the business bank loan.
-The bank then makes you a loan dollar for dollar.
-Deposit the money from the loan or line of credit into a separate account and use it exclusively to re-pay itself.
-After the final payment, you return their money with interest. Remember their money is in a CD earning interest.

This technique gives you a great start towards building excellent business credit scores. We work with several lenders that offer this program.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using our exclusive Business Credit and Financing Suite as well as consumer credit restoration and optimization. www.ExpertCreditConsultants.com.

 

5 Factors That Affect Your Business Funding Approvals

What gives you the best chances of getting a BUSINESS loan or credit? Here are a few factors that play into your business credit picture, and what you can do to make the most of them.

1.    Payment History - Just like your personal credit, your business payment history is an important part of your business credit profile. It is what your D&B Paydex score and other business credit scores are based on. Many credit opportunities come with a minimum Paydex requirement. What you can do: always pay vendors EARLY.  On time is okay, but paying early (as in before you receive the invoice) is best. MAKE SURE YOU HAVE EXCELLENT BUSINESS CREDIT SCORES WITH THE PRIMARY BUSINESS CREDIT REPORTING AGENCIES.

2.    Credit Applications - Believe it or not, multiple applications for credit can be a red flag that will keep you from getting approved for a loan. Too many in a short period of time will make your company look desperate and be a sign to potential lenders that things are going downhill. What you can do: plan your use of credit accordingly, and keep applications to the minimum necessary to accomplish your goals. This is where you will greatly benefit from our services. You’ll know what the underwriting requirements are BEFORE you even apply.

3.    Blanket UCC Filings - One thing that many people don’t realize is that they need to pay attention to the order in which they get certain types of loans, and what UCC filings some lenders will file. Some lenders may file a “blanket” UCC filing, which essentially says they have an interest in ALL of your assets. These blanket UCC filings will then take precedence over any subsequent ones, which drastically reduces your ability to get credit elsewhere.

What you can do: plan your credit carefully, and negotiate UCC filings according to what your needs are. For example, if you need particular assets excluded from a UCC filing to use as security for another loan, explain that fact in advance to get those items excluded from any blanket filings, or, alternatively, get the loan or account with the more specific UCC filing first. Some experts recommend opening accounts with competing UCC filings at the same time, and negotiating the details with each party simultaneously.

4.    Company Financials - With D&B, it’s important to make sure your financials in your credit file are up to date. If they are not, it could negatively reflect on your company when the lender is comparing the available data. What you can do: update your financials on your credit reports so that they reflect your current circumstances, and plan to do so periodically.

5.    Company Legal Structure - The legal structure of your company (LLC versus INC versus Partnership, etc.) can also affect your business credit. Lenders are less likely to loan money to Sole Proprietorships and Partnerships than Corporations or Limited Liability Companies.

What you can do: if you aren’t incorporated, you should be. The advantages span far past just your ability to get credit.

There are other factors that affect your ability to get credit, such as the amount of debt your business already has, how heavily invested you are in your company, and even your personal credit can play a role in your approval or denial. Here we’ve covered five of them. In the end, the better the all-around picture you can paint, the better your chances of getting approved for loans will be.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using our exclusive Business Credit and Financing Suite as well as consumer credit restoration and optimization. www.ExpertCreditConsultants.com.