Loans, Insurance & credit card information

When you are applying for a small business loan have you often wondered what Bank Managers look for when deciding whether to support your request or not?

One of the key aspects is you. If you are running a small business then more than likely the business is really just you and probably not many other people. You may operate under an impressive name or from glitzy offices but if it’s all down to you then from the bank’s perspective ‘you’ are the key to a safe lending.

Here are just a few aspects of a person’s character which banks consider important.

What Is Your Age?

Like it or not, age has to be a factor in the credit assessment. If a businessman, particularly a one-man band operation, asks for a loan repayable over 25 years and he’s already 70, the chances of him being around to see repayment are pretty slim! If he is also the key person within the business who makes it all tick, then his loss may have an impact on business performance.

On the other hand, a spotty-faced 18 year old just out of school asking for $100,000 may not be considered a strength either! Age is not a major problem but it is something taken into consideration.

What Is Your Level of Commitment?

A Manager can usually get a feel for a person’s commitment to the project or business in a variety of ways. For example, it can come across in their language and the passion with which they talk about the business. The Bank wants to see someone who is both passionate and enthusiastic about the project, so you can see now why it’s important to look and sound confident.

A business owner’s commitment can also be measured in more tangible terms such as how much of their money they are putting into the venture or alternatively how much they have withdrawn from the business over the years. If the owner has regularly injected cash into the business to help with working capital or to purchase new machinery, then this is an encouraging sign. However, if cash is being withdrawn on a regular basis for no apparent reason, then the Manager will have to ask why, as it may not demonstrate full commitment to the business.

But what if only a small amount of cash or no cash at all is being put into a new project? Well, if you haven’t got it, then you haven’t got it! However, commitment can be evidenced by the fact you are willing to pledge your house as security.

In the meantime, a question to ask yourself is how does your commitment to the business look to an outsider?

Seeing what the business owner has put in, and what he’s prepared to lose, will help the Manager come up with a fair assessment of the person’s commitment. Hopefully it’s going to be assessed more as a strength than a weakness!

Can You Be Considered a Person of Integrity and Honesty?

This is a difficult one to assess but we all pick up vibes about individuals within a few minutes of meeting them. Things either ring true with you or they don’t.

To back up his intuition the Manager can often get information about someone from other people. Staff within the Bank are sometimes a good source of information for Managers. Every office has someone who seems to know everything about people in the locality! These people are a fountain of knowledge!

If you have skeletons in the cupboard, don’t assume they won’t come out! If they’re bad enough they are bound to surface and it can impact upon your chances of success.

What Was The Source of Introduction?

In preparing your Business Plan, or building your new business, you may decide you don’t want to present it to your own Bank for a variety of reasons

Having made the decision to refer your Plan elsewhere, you have 2 options: you can either turn up cold at the Bank of your choice, or you could ask a business colleague to introduce you to their Bank (assuming they are happy with the service they are getting).
If he knows you and the skills you possess, he may be prepared to do more than point you in the right direction; he may be happy to “vouch” for you. By doing this, he’s telling his Manager that, in his opinion, you have a good chance of success and that you are worthy of support.

If your introducer is a respected businessman and operates a good account at the Bank, then this type of introduction could be considered as a strength, a positive point in your favour.

You can see that in operating a small business you are a very important asset where the Bank is concerned. Make sure you capitalize on that when approaching the Bank for a loan.

Robert Warlow
Small Business Success

Unless you were born wealthy, or struck it rich in the state lottery, you have probably been cash strapped at one time or another while running a small business. If you are a daring businessperson, maybe you enjoy running things by the seat of your pants. But a lack of cash can make you pass up on opportunities to make your company live up to its full potential. You may have to pass up on new equipment, hiring an employee, or extra advertising. These investments could provide a great return on investment, providing you with more profits. But if you do not have the cash to make the investment, the opportunity will pass you by.

But is that the way it has to be? Could you find a lender to invest in your company? Maybe your business is new, and so you have not had a chance to establish credit. Or maybe you have been late on some payments, and since your credit has a bad rating, you do not think anybody will give you a second chance. However, you did not start your own business by being a person who gives up or lets opportunities pass you by. Maybe it is time for you to reconsider your opinions about business financing.

In fact, I let my own business stagnate due to a tight cash situation. I had a profitable paid search advertising campaign, but I set the daily limit to a low level because I needed to fund it, and I had to wait until the next month to collect revenues. Since I limited my daily budget, I also limited the website traffic I could convert into sales! Since I limited my revenue by the limit I could afford for my advertising campaign, it seemed as if I was in a situation where I could never catch up and maximize the profits from my website. When my daily budget ran out, my competitors were collecting the visitors and sales that I could have had.

I finally searched for business financing. I did not need a lot of credit, but just a few thousand dollars so I could step on the gas on my sales. However, since I had never gotten any outside money for my business, I did not think I could qualify. Since I ran an internet business, I searched the net for business financing, found an online form, and was very happy to be able to apply in just a few minutes. To my surprise, I was approved! Since the funds allowed me to turn up my advertising, and also my returns, I managed to pay off the loan in a matter of months!

If you are a small business owner, do not let that next opportunity pass you by. Your business life does not have to be that difficult when you can find lenders who are willing to invest in you.

Raising sufficient working capital is an essential requirement for any business start-up. Moreover running a small business often calls for the need of a financial boost at times of crisis. The business cash flow can be disrupted due to various unforeseen reasons. Payment of dues, purchase of new equipment or starting new business venture might cause additional disruption in cash flow particularly of a small business. There are plenty of options for choosing the right service to acquire this capital, and this process could be quite confusing. The mode of financing is an important element that determines the success of the organization and thus an exhaustive understanding of the available funding options is almost mandatory.

Business cash advance is one of the most popular modes of acquiring essential business finance. It is almost similar to a payday loan. However, payday loan requires an individual to provide proof of employment and salary whereas business cash advance is perfect for an entrepreneur to get funds when he lacks perfect credit or doesn’t have the ability to get funds by other means. The only requirement of business cash advance is that the business should accept credit transactions, i.e. it should allow it’s customers to pay with visa or master cards. It is just an advance and not a loan; hence every time the business receives a payment, a part of it is automatically forwarded to meet the repayment of advance.

Working capital loan, another great way of acquiring funds is the traditional and most commonly followed method by most small business. However, it is not as easy to get funded in this mode as compared to business cash advance. Working capital loan is difficult to qualify for when compared with business cash advance as an alternative source for working capital financing. The credit score of the borrower, the available collateral and various factors are carefully considered before acceptance of working capital loan. However, most small businesses would easily qualify for a business cash advance.

Getting a working capital loan involves a lot of paperwork and quite some time. However, it is not the same for business cash advance. Business cash advance is processed much faster and it involves relatively less paperwork, thus simplifying the process of working capital financing. Moreover a business cash advance does not have a fixed repayment schedule as the case is with working capital loan. The repayment is done from credit card sales receipts and the businesses generally do not feel the pinch. However in case of working capital loan, if the borrower fails to repay the working capital loan, it might not only affect his credit score but also poses a threat of losing his collateral. Irrespective of the business volume on a particular month the borrower will need to repay the working capital loan according to the pre determined fixed amount.

Considering all these, it could be well concluded that a business cash advance is much easier option for an entrepreneur to acquire working capital financing.