 |
Further
Reading ...
|
|
Guru Interview Of The Month -- Cathy Wagner - Lawrence Doro
Guru Interview Of The Month -- Cathy Wagner [Lawrence] Cathy, could you briefly describe some of your online business operations and products/services? [Cathy] Sure, I am a one woman operation working out of my home. My site,...
7 Strategies for Sustained Innovation - Dr Robert Karlsberg and Dr Jane Adler
The need for constant reinvention is a given in today’s business environment. And while a breakthrough product or concept can catapult an organization ahead of its competitors, in these fast-paced times, that advantage is often short-lived. While...
How Safe is Your Success? Part 2 of 8 - Bill Hely
"How Safe is Your Success" is a series of eight articles. Each article addresses a different aspect of a universal problem which is of particular importance to those who do business on-line. Most Internet users are at least aware there are dangers...
We Bought A House For $17,500 - Steve Gillman
Good Homes Under $50,000? My wife Ana and I found cheap homes for sale all over during a seven-week cross-country trip, and we even bought one in a pretty little town in the mountains of western Montana. We paid $17,500, spent almost $2000 to...
|
|
|
How to Get a Business Loan in 5 Steps.
|
 |
Written By:
Dave Miller
|
|
|
A lender looks at a loan request in three sections known as the 'three C’s'. They are:
·Credit. Did you pay previous lenders back as contracted?
·Capacity: Can you afford to pay back this loan?
·Collateral: If you don’t pay back the loan from what asset can the lender recover their principal?
Step one is:
1.Identify your strength and weaknesses in the '3 C’s'. Do this as would a lender – with a very critical eye. Identify your loan to value ratio and your debt service coverage ratio. If you have reason to believe that your credit is less than sterling, get a copy of your credit report including your credit score.
Each lender has different criteria with the cost of the loan being higher as your strength in the '3 C’s' is lower. Step two is:
2.Identify lenders who lend to your level of borrower and to your industry type. Call lenders to get their criteria. Learn about the SBA 504 program and 7A loan guarantees. Find who others in your industry have used for financing.
If there is a gap (not a canyon, just a gap) between your borrowing ability and lenders' criteria, a loan broker may be able to help. They spend their working hours finding second and third tier (more aggressive and more expensive) lenders and establishing relationships with them. They can act as a salesperson for your project in ways that you as a principal cannot. Step three:
3.If you cannot find lenders on your own, consider hiring a commercial mortgage broker. Be careful – in many areas there is little or no protection under the law for commercial transactions. While a small upfront fee for out of pocket expenses is reasonable, shy away from any that want large upfront payments. If they can - continued below ...
|
|
|
continued ...
do the deal they will be paid very well at settlement. If they can’t do the deal they shouldn’t be taking your business at all.
Once you identify a list of potential lenders or hire a broker, get prepared. Do not think that the business loan process is merely a matter or forms and paperwork. While there is more paperwork than you’d ever want to see, it is more of an inquisition. Step four:
4.Be an expert salesperson for your project. (Obviously), we think that you should use FundablePlans.com to build a business plan and use it as a written proposal. Whatever method you use, know your numbers and be able to defend them. Understand your market and be able to speak competently about it. Know your competition. Most importantly, (from step one) know your strengths and weaknesses as a borrower and be able to maximize the strengths and minimize the weaknesses.
If you are successful with steps one through four, you will expect to 'hit a home run'. You may, but most likely you won’t. Step five:
5.Don’t give up. Where one lender might have too many loans of your type in her portfolio, the next may need exactly your loan to meet his goals (loan officers are paid to lend). This is not to say that you should 'beat a dead horse', but if you have a viable project, a good presentation and good “C’s”, you will be able to get financing.
Good luck with your project, if you have questions about funding feel free to use the e-mail address below.
About the Author
Dave Miller is a business consultant and the creator of FundablePlans, an online business plan builder at http://www.fundableplans.com . Dave can be reached at dave (at) fundableplans.com .
|
|
|
|
 |
|
|
| _Additional Resources ... |
|
Taxing Your eBay Profits - Tim Knox
As a small business person-slash-advice columnist I dread the first quarter of the new year. Not because in my mind my own business fortunes start at zero again every January or because I have already dismissed every New Year’s resolution I made...
Small Business Q & A: Don't Fall For The Latest Internet Identity Theft Scam - Tim Knox
Q: I use PayPal to accept credit cards for my online collectibles business. I recently received an email that my PayPal account was going to expire in five days if I didn't click a link in the email and give them my PayPal account information. Being...
The Informations Age and Making Money! - Livvie Matthews
The Information Age and Making Money! Copyright 2002 Livvie Matthews The Internet is the most powerful and most incredible marketing device ever invented plus it's the most cost effective! We live in the "Information Age" and travel down the...
|
|
|
|
|
|
|
|
|
|
