Access Financing, Become Bankable, Loan education

Unfortunately, the internet is full of those who just want to separate you from your money. From things like products that do not do what they claim, to making service promises that do not exist or that cannot be fulfilled. One such myth is that of getting hundreds of thousands of dollars in cash business money with having poor personal credit and no real business. We are positive you have already seen those ads and videos.

So, let’s explore what is real versus what is not.

It certainly is true that there are business-to-business credit lines for products and services available by using business credit only and not having to provide a personal guarantee. There are also store and fleet type business credit credits available using business credit only to get approved. We can all agree that your Fuelman, Best Buy and Home Depot business credit cards are valuable to have, but they are not cash, and they can only be used for the products offered by those businesses. The same is true for the thousands of available net-30 business to business lines of credit for the products or services those businesses offer, but again they are not cash.

When it comes to working capital cash type funding from a bank, credit union, the SBA, or cash access business credit cards like Visa, MasterCard and Amex, then typically anyone owning 20% or more of the business will be expected to sign a personal guarantee. This requirement does tend to go away after your business is more than three years old and when it exceeds one million a year in gross annual revenue.

Other factors at play in not having to give personal guarantees for your business loans are things such as having a high bank rating, having existing larger credit limits which create comparable credit and having business FICO scores in the 200 and up range. Until your business reaches those milestones you will most likely be required to sign personal guarantees for any working capital "cash type" loans.

One way to get there quickly is to do business with a local or regional bank that specializes in small business lending within your community.

How is that done?

• First, you can utilize non-bankable funding to access working capital from alternative business lenders that will use your business revenue, your existing assets or your personal credit to provide funding. Non-bankable alternative business lending programs mostly do not report on your business credit.
• Then, you open a certificate of deposit at a business lending friendly local or regional bank and use this to secure a 100% one for one new business line of credit. Your new business line of credit will then report to the Small Business Financial Exchange where your credit line and its payment history will be picked up by Experian, Equifax, Dun & Bradstreet and most importantly FICO SBSS.
• Next, your new reporting bank line credit will put you on the credit radar of other business credit providers making it easier for you to get approved for the type of non-cash credit lines we discussed above such as store cards, fuel cards, and business to business credit lines. It also makes it more likely that your business will be approved for much larger amounts than are typically given to starter accounts.
• Last, once your business has developed 10 to 15 reporting lines of credit and you have a history of paying on those credit lines either on time or early you will be on your way to being able to access more credit for larger amounts and without having to sign a personal guarantee for them all. Accessing working capital cash type loans without a personal guarantee will require your business becoming bankable.