The 4 Cs of lending

If you are looking for money for your business then you will be happy to know you only need one “C” to qualify with us. With a bank and almost all Loan Brokers, you will need all four.

The first C is Cash Flow.

When you have an existing business with good cash flow you can qualify for business funding. If you do have verifiable cash flow, this substantially increases your chances of being approved for funding. There are many funding programs you might qualify for, one being Business Revenue Lending.

Second is Collateral.

If you don’t have cash flow, your business still might have Collateral. Collateral for your business is really your business assets. Many things can be used as collateral including equipment, purchase orders, credit card sales, even account receivables. Having Collateral greatly increases your chances of being approved.

Third is Business Credit.

If you don’t have cash flow or collateral, you still can qualify for business funding. Lenders also look at your business credit to qualify you. Business Credit is our third C. Lenders will lend you money with no personal guarantee based on your business credit profile and score. If you have a good business credit profile you can use that as security to obtain funding. If you don’t have business credit built now, call us so we can help you quickly build an excellent business credit score and profile.

Fourth is Personal Credit.

Maybe you are just starting a new business, and you have no business credit, cash flow, or collateral. In this case you can still qualify for funding. But lenders will use your personal credit to qualify you. Personal Credit is the fourth C that lenders will look at to approve you for funding. You can secure credit lines through us, up to $250,000. These types of unsecured credit lines do not look at revenue or financials. Your good personal credit is all that is used to qualify you for funding. If you don’t have good credit, we can also help you improve your personal credit profile to secure funding.

All you need is 1 of the 4 “C”s to qualify with us. And we can help you build business credit and improve your personal credit so you will qualify for the most business financing possible.

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.

Bank Credit and Bank Ratings

Bank credit is the total amount of borrowing capacity a business can obtain from the banking system. Banks have their own internal way of scoring and rating businesses credit worthiness. They do this through a system called bank ratings, which rates the credit worthiness of a business from the bank’s perspective.

A business can secure more business credit quickly as long as it has a minimum of one bank reference and an average daily account balance of at least $10,000 for the past three months. What lenders REALLY want to see is that a business has this $10,000 average balance. When a business has this, it yields a “Bank Rating” of Low-5, meaning the business has an average-daily-balance of $5,000 to $30,000.

A business that has a balance of $7,000 to $9,999 will net the business a lower rating such as a High-4, which will make it harder for a business to get approved for bank financing. Here is the actual bank rating scale, so you can see where you business might rank:

    High 5, account balance of $70,000-99,999
    Mid 5, account balance of $40,000-69,999
    Low 5, balance of $10,000-39,000
    High 4, 7,000-9,999
    Mid 4, 4,000-6,999
    Low 4, 1,000-3,999

There are other factors outside of average bank account balances that affect this rating. A business will be scored higher if it has the average balance of $10,000 for 3 months, so it’s crucial that the money be in the account, and stay in the account for 3 months to maximize the bank rating.

Overdrawing the account and obtaining non-sufficient-funds charges is one big way any business can severely hurt its bank rating. For the best rating, a business should ensure their bank statements reflect a positive cash flow.  Positive free cash flow is the amount of revenue left over after the company has paid all its expenses.

When the account shows a positive cash flow it indicates that the business is generating more revenue than is used to run the company, increasing the bank rating. The bank rating is also improved when the business has a consistent amount of regular deposits.

Other factors can also affect the rating including age of the bank account, other bank products that the business uses, and how many investment and savings accounts the business has.Having a good bank rating is essential with securing bank financing.

To maximize your bank rating ensure you keep your bank balance average over 3 months as high as you can, preferably over $10,000 and that your account doesn’t go negative.

Take advantage of and use other services your bank offers such as CDs, savings accounts, and other investment accounts  and open your bank account when your corporation starts, and leave it open as this longevity will help your bank rating.

Make consistent deposits on a regular basis into your business bank account and ensure each month you have good cash flow through your account by regularly putting into the account more money than you take out. Taking these steps will ensure you have an exceptional bank rating and can get approved for the greatest amount of bank financing. 

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.