A business owner’s most important task is making their business sellable.
You can sell it.
This thought should guide every business decision. Entrepreneurs will have a better chance of long-term success if they can make business decisions based on this underlying idea (in the context of financing).
Lending institutions base their acceptance of or declination on a single thing.
Are you able to lend attractively to the business?
When financial institutions approve or deny a loan application, there are 20 points that every business owner must meet. These are often small and seemingly insignificant ideas. Let’s take a closer look from the perspective of the lenders.
Many business owners apply to banks and lending institutions for loans. They are not eligible to borrow money.
These entities are not considered viable businesses by banks. These guidelines are the first step to getting past computer guidelines.
If you did not have these documents, your loan officer would receive a two-digit code from the computer system. It says, “Loan Application declined. Without spending time researching the matter, your loan officer could not tell you what you need to do to get approved. The underwriting guidelines are not available to loan officers.
This article will discuss the top three reasons business owners fail to build credit and finance their businesses.
First, the business owner may need to do everything right to run their business. A business owner looking for financing should have a dedicated fax number and an 800 number. Many of the small business owners I meet are looking for financing options. Seeing how many businesses still need to complete the first three steps is amazing. The goal is to make your business attractive on paper. If you don’t have an 800 number, it is recommended that you are a “mom-and-pop shop” and not set up for success.
Second, many business owners need to improve their business credit. There are many ways to build your business credit. Lenders see business owners as trying to get revolving credit lines but are denied. When establishing business credit, it is crucial to get approved for the correct types of credit and be approved for them.
Most entrepreneurs’ third and most important point is that they have not separated their personal liabilities from the business. A business owner should have good receivables. However, it is equally important that business owners’ credit is not tied to their business. You should keep your personal and business finances separate for two reasons.
You want your financial situation to ensure your company successfully obtains financing. You also want to avoid your credit being affected by something that happens to your business.