Why not try to obtain funding by yourself? You can, if you can answer the following questions with “yes”.
Do you know where to get funding?
The answer was simple in the past.
But post recession, funding is very difficult to attain for startup.
Businesses or expansion of companies that do not have:
- 5 million in assets,
- 36 months consecutive months of positive cash flow,
- and very high PayDex and personal credit scores.
For this reason, you must have established relationships with multiple banks to attain high amounts of business funding.
So, the question you want to ask yourself is: Do you have established relationships with several banks you have worked with in the past?
Do you know how to negotiate with these banks to increase the lines of credit so you are left with a high amount of funding for your business?
I could keep going with questions to ask you about the details of attaining funding.
But, as you can tell, attaining high amounts of business loans can be very difficult if you are not working with the right company that has the expertise and experience to get you what you want.
Do you know if you are ready for funding?
Most people think credit is easy to understand.
- Take negative accounts off.
- Add positive accounts on (i.e., tradelines)
- Then, apply for funding.
Unfortunately, is not that simple.
For example, do you know the balance that you need to maintain in order to apply to different banks for business funding? Do you know which negative accounts on your file could be problematic for attaining funding? Do you know if you have enough credit card history to apply for loans successfully? Last but not least, do you know what banks look for to approve you for high lines of credit for your business?
If you do not know the answers to these questions, do not feel bad.
I know experts that have been in the funding industry for several years and they still are working on answering these questions adequately.
But, this is one of many reasons why you should be working with a company that has the expertise to get you what you want.
But let’s keep going.
Can you time everything correctly?
There is no overnight solution or magic trick to fixing your credit and attaining business funding.
There is an order.
Once you ensure everything is done chronologically, then you must time it correctly.
Do you know:
- if negative accounts will reappear on your file in the middle of applying for lending?
- how long the authorized user trade lines will last on your file?
- if your funding company has enough time to negotiate with multiple banks to increase the lines of credit on your file?
This is the number one reason why individuals should not fix their credit and apply for funding on their own.
Just like the general contractor. They are used to building a house in a timely fashion. They organize the company that pours the concrete. They call in carpenter, the plumber, and the electrician. You want to have a general contractor for your credit repair and for funding.
Timing is very crucial to the point that if it is not done right the first time, you can waste money as a result.
Here’s some ideas:
No lender is right for everyone.
Everyone has different needs.
So, here’s some options you should consider.
- In terms of basic financing for your business, you should start with the SBA. They have the best terms, rates, etc. However, they are very strict. And, qualification is limited and difficult.
- You should search Google, like this: “[my field] funding”. This will turn up sources of funds for you business venture. Suppose you’re starting some kind of education program. You’d find results for just that.
- If you have a following (friends, family, etc.), you could consider a GoFundMe campaign.
- If you think you could qualify for a grant, you should consider a Grant from the government.
- If you’re looking for complicated capital, you will need to go to an investment banking.
- If your funding goal is really out there, you may need to go hard money or see if you can get someone to lend their self-directed IRA funds to you.
Hope that was helpful!