Access Financing, Become Bankable, Loan education

Unfortunately, the internet is full of those who just want to separate your business prospects from their money. The scams are things like products that do not do what they claim, 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 many store and fleet type business credit credits available using business credit only to get approved. We can all agree that business accounts such as 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 payment terms business to business lines of credit lines for the products or services those businesses offer, but there 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 a 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 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 a business reaches those milestones the owners 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 the community where that business is located.

How is that done?

• First, a business can utilize non-bankable funding to access working capital from alternative business lenders that will use the business revenue, the existing assets or the owners personal credit to provide funding. Non-bankable alternative business lending programs mostly do not report on business credit.
• Then, th business can 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. The new business line of credit will then report to the Small Business Financial Exchange where the business credit line and its payment history will be picked up by Experian, Equifax, Dun & Bradstreet and most importantly FICO SBSS.
• Next, the new reporting bank line credit will put the business on the credit radar of other business credit providers making it easier for them 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 the business will be approved for much larger amounts than are typically given to starter accounts.
• Last, once a business has developed 10 to 15 reporting lines of credit and has a history of paying on those credit lines either on time or early, it will be on its' 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 the business to become bankable.