Drug testing

Three Cs - What Startups Need to Get a Business Loan, Part 1

You want to get a good, solid overview of what it takes to acquire that business loan you need, especially if you are a startup. The essential element of what the lenders out there require of you can be wrapped up in the acronym, C. C. C. These are...

Cash - Decide how much money you want to borrow, what it will be used for specifically, and how much you personally will put down on the loan. The more cash you can come up with the better, period.

Credit - Your personal credit score really should be 700 or better. Unless you've got tons of cash and collateral, don't even attempt a loan request until it is. Personal credit reports can often be obtained free and securely over the internet.

Collateral - The more collateral the better. The lender will establish a loan-to-value on all of it. Having a house to pledge is a huge plus. Keep in mind, though, that little or no cash and lousy credit will not be made up for by an excess of collateral.

You must decide how much money you need and how much you can raise for a down payment. You must get working to make that credit score of yours better. You know how many assets you have, and should find out what their liquidation value is. You need to discover how to get your hands on additional cash and collateral should the need arise...

Still with me? Good. If you are serious about starting or enhancing your business through a loan, you need to understand that lenders will want to know how much skin you have in the game. After looking into a loan possibility, many aspiring and existing entrepreneurs conclude that the money lending industry is too demanding and complex, and the sheer volume of information required by them is overwhelming. Then, discouragement sets in and drains all the excitement and enthusiasm out of them.

But perhaps it's prudent to think from the lender's perspective for a moment. Imagine a stranger approaches you, nicely dressed and polite, and proceeds to enlighten you on his idea to build a lovely espresso stand just down the street from your house. His vision of the success of this venture is optomistic, he apparently has a little experience at running coffee joints, and is now inquiring if you would like to fund the construction and initial operation of this hopeful enterprise.

So, naturally you begin to be a little inquisitive...

You: "How much cash will you have on the line for this project?"

Him: "Cash?"

You: "Yeah, you know..., money? And, since I'm asking, how's your credit? Have you been making all of the payments to your creditors on time?"

He begins to squirm.

Him: "Well..., about the money thing, I wouldn't be coming to you if I had any of my own. And, as far as my credit is concerned, it's happens to be pretty good...I think."

You: "Do you have any assets that can be pledged against this loan in case of a default?"

Him: "Default?! Good grief, man. Can't you tell by looking at me that I'm a man of my word?!"

You: No.

At this point, he leaves your presence discouraged, fuming, or both. No one in his right mind would fund such a proposal at face value. On the other hand, if that same man came to you (and you were in the business of lending money), laid out a sensible business idea, put up 20% of the loan amount in cash, had good credit, had experience either at running a business or in the industry he was proposing, and had a sufficient amount of collateral to cover losses due to unforeseen circumstances, you might consider him a "good risk", wouldn't you?

All lenders have the difficult task of making future decisions based on historical information. Commercial or private lenders such as commercial finance companies, leasing companies and mortgage banks, though not directly regulated by the government, still must adhere to certain credit granting criteria. Institutional lenders such as banks, credit unions, savings and loans, etc., lend money obtained by borrowing from their depositors. Thus, they are both regulated by the government and more critical in their policies regarding lending. Regardless of whether you approach one or the other, neither one of them are in the business to lose money. Give them reasons to lend to you. Did you know that lenders want to provide money to you? Let them!

By preparing your personal three C's properly for the scrutiny they will endure, you'll give the funder a good opportunity to fulfill your request for business startup capital. There are many other details involved in the process, such as the sizeable amount of paperwork you need to prepare and gather. But, if you're serious and confident about your venture, pony up and be willing to hurdle the necessary fences to satisfy the lender's requirements. At that point, an independent loan broker will be one of your most valuable allies. Contact a professional who can walk with you through the process and explain the details of the transaction. Your chances for approval will become greater and your lender will thank you.

In part 2 of this article, we will examine the types of paperwork necessary to package a startup loan request to the lender.

Mark Uptain is the owner of Regent Business Capital, a loan and lease brokerage that works with lenders nationwide to help small and medium-sized businesses get financing. His website http://www.EquipmentLeasingSource.com, offers free equipment leasing information and competitive quotes to businesses throughout the United States.

limousine chicago service
In The News:

Two Types of Business Plan Executive Summaries

Companies seeking capital often ask how long the Executive Summary... Read More

The Reluctant Entrepreneur

It seems odd to think of a person opening a... Read More

Work vs Play: Which is the Better Way to Make Big Money?

If you want to make big money, you have to... Read More

Envisioneering

It never ceases to amaze me. Almost everyone peers into... Read More

How To Find Hot Online Business Ideas

Would you like to find the key that unlocks the... Read More

How Home-Based Business Entrepreneurs Think

Too many people are trying to start their home businesses... Read More

Business Is No Guarantee of Riches

Q: I'm thinking about starting a business since that seems... Read More

Drive Website Traffic Unconventionally, Force Your Children To Do It

If you believe that every little bit helps then keep... Read More

What It Takes To be An Entrepreneur Series: Action

Many people have the professed desire to be their own... Read More

Oil Change Guys History; Part II

Franchise companies are not born they are made and when... Read More

Curb Your Enthusiasm

Isn't enthusiasm a good thing? Aren't we urged to be... Read More

Herb Filled Pillows Make Over a Million Dollars

Lauren Rosenstadt was a single mom working at a herbcompany... Read More

Double Your Income Automatically

It is a common known fact that it is far... Read More

Is Running a Business for You?

Not everyone is cut out to run a business. Not... Read More

Double Down on Marketing

If you want to compete in the world of high... Read More

Franchising Companies Need New Franchisee Checklists

When franchise companies are moving fast in the market place... Read More

How To Start a New Business

While it is tempting to just leap into a new... Read More

7 Small Business and Self Employed Law of Attraction Principles For Success

It is widely held that one of the most important... Read More

Will Your Business Survive Without You?

I had a health scare in December.As it turns out,... Read More

Work On, Not In Your Business

Are you busy? Everyone's busy! Ask anyone they'll tell you... Read More

3 Essential Elements of Operating a Successful Business

Have you ever imagined what it would be like to... Read More

New Rules

Last week I was working with one of my small... Read More

Salon Marketing Using Wireless Broadband Internet Access

Our client in Chicago did, located right outside downtown too...a... Read More

Reducing the Stress of Being an Entrepreneur

Starting and running your own business can be exciting and... Read More

PR That Entrepreneurs Often Overlook

If that sounds like you, here's what you may be... Read More

white led light led outdoor lights Pete's produce ..