Small Business Credit

Small business credit must make sense. Often a loan request will not have the proper ingredients for a successful review. It is important to prepare your small business loan request within the rules of the lending game. Lenders will quickly snuff out an inexperienced borrower. Many good deals are overlooked because the bankers are quick to judge the credit based on its initial presentation.

Lenders will want your small business credit request to have the following ingredients;

  • A down payment. Typically ranging from 15%-30% of the total project amount.
  • 100% collateral coverage. Don’t count on an SBA guarantee to mitigate this risk. You can use business and personal assets to reach the collateral coverage if needed. You may be required to put more money down to help reach collateral requirements.
  • A valid source of repayment. The lender will analyze your historical and projected cash flow to see if the loan can be repaid.

Making sure your request has these three ingredients will give your banker a better shot at funding your loan. These are normally the first three things a lender will review as a quick test to dig deeper or deny your loan request.

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