Essentials Steps for Credit Funding

By Walter Nunez & Yhordan Serpentini

If you have ever tried to secure business credit at a bank, you already know how hard it can be to get approval. Once the business owner is turned down by their lender, studies have shown that they rarely look anywhere else for funding; business owners just do not know where to look outside of their bank.

The 5 Essential Steps

Business owners do have other channels to secure funding such as online lenders, private lenders, credit unions, micro lenders, and community banks. There are literally thousands of lenders to choose from.

If you are unable on the first attempt or before you attempt to acquire funding, follow these 5 essential steps for a higher chance of success through any channel.

Ensure Your Business Has a Credible Foundation – professional email, website, business phone number, 411 listing, non-residential address, accurate information on EIN, accurate information on state documents, and all required license and permits if applicable.

Understand the 5 C’s of Credit – Credit history, Cash Flow, Collateral, Capacity, and Condition. These vary from lenders and consumer credit and not all 5 are required to have to depend on the request.

Establish a Good Bank Rating – This is known as an “internal score” which is a mixture of account balances, account types, account history, and account management.

Strengthen your business credit profile – If you have a strong business credit profile and score then lenders can rely more heavily on the business credit profile than the consumer credit profile for a credit decision.

Know your business strengths and weakness – While lenders’ credit risk policy may focus on the weakness and raise red flags. Be prepared to address them and counter with your business strengths. Your business may have more strengths than you think, especially if you have collateral such as real estate, equipment, account receivables, inventory, strong cash flow, business assets, 401k, and IRA among others.

Here, at Jaeli Capital Consulting, we will guide you down the path of credit building or funding. We will make the process streamlined and efficient for you. Please reach out for a free assessment and please follow us on our social media platforms.