Requirements to get a business loan in 2010
Do you need a cash infusion? Do you know what lending options are available to you as a business owner?
Dana and I heard a panel of banking and financial experts last week in Dallas. Here are some of the highlights we believe you should know:
• Credit policies of lenders have gotten tighter the last 3 months despite White House encouragement to make small business loans. Number one reason: Americans are reducing unnecessary spending. They mainly buy needs, not lots of wants. What are you selling? Wants or needs?
• The Small Business Administration is using stimulus funds to eliminate the fees associated with originating a 90% guaranteed SBA-backed loans. This is a great opportunity to save thousands of dollars on a government guaranteed loan. We can help you get in contact with bankers that will help you navigate through the lending process. Be advised however, these loans usually take a long time to get approved, so this may not be the best option if you need a cash infusion immediately.
• If you need cash quickly, consider factoring (selling) your accounts receivable. We have local firms you can contact.
• Lenders have three primary requirements to even consider a loan application. The business owner applying for the loan must (1) have a 650+ FICO score; (2) have equity in the business; and, (3) be able to answer lender’s questions regarding the business’ Balance Sheet, Income Statement and Cash Flow reports.
Our SBDC will begin a series of weekly free 60-minute workshops in February to train you how to read and interpret your Balance Sheet, Income Statement and Cash Flow report. Call 817-272-5930 or e-mail tpryor@uta.edu for information on the workshops. We will post the dates and topics on our home page next week.
