5 min read
The opinions expressed by the entrepreneur's contributors are their own.
In addition to the Paycheck Protection Program and Small Business Administration, businesses need money. But what if you can't get a PPP loan? For example, if you own a cannabis store, casino, or race track, you are out of luck. In fact, when you go through all the requirements for PPP loan approval, you may find that you don't want to worry about it at all.
Related topics: SBA publishes new EZ PPP application for lending
Now Congress has set the next iteration of the program, but your company still needs money. How's it going? Looking for a loan elsewhere. Here we start.
Many business owners turn to their bank or credit union first, but look into alternative lenders like Kabbage. Often times, these lenders have less stringent qualifications so poor personal creditworthiness is not necessarily a handicap. However, their interest rates can be higher than the standard small business loan rates from a bank or credit union.
Work with a bank or credit union
You may get better small business loan rates with a more conventional lender, but it will be more difficult to qualify. Here are some tips on how to qualify.
Related Topics: Keep These 7 Strategies in Mind When Reopening Your Business
Working with a bank means ensuring the company's funding capability. Funding eligibility is your company's ability to obtain funding. Some of these elements are under your control, the business owner. It makes sense to do everything possible to remove simple reasons from lenders to say no.
Your company has offers everywhere. Online it's your website, but also Yelp, Google, the Better Business Bureau, and more. Don't just look for misspellings and correct information. You also need to keep your information consistent from place to place. For example, make sure that when you write Limited on Yelp, not just Ltd. write on your website. Make sure you use the term "restricted" on your website so the listings are consistent.
Why is matching so important? Because lenders are not going to stop examining all the possible ways your business could possibly get listed. If they don't find what they want quickly, lenders will consider it a scam. As a result, your application will be rejected before it even starts.
If you haven't already, it's time to buy your own domain from a web hosting company. Often times, you get a package that includes email or is inexpensive. You can have your domain email forwarded to a provider of your choice like Gmail at any time. An email address like firstname.lastname@example.org and a website like www.website.com go a long way in ensuring that a lender makes your business not just a hobby.
Professionalism also means receiving an EIN from the IRS and a DUNS from Dun & Bradstreet. Companies have these identification numbers; Hobbies not. Professionalism also means involving, or at least using, a DBA. An added bonus of incorporation is protecting yourself and your personal assets from many types of corporate liability.
Licenses and training
Many industries require some form of licensing. In some cases, the industry also needs training. Often the Foreign Minister's office has this information.
Time in business
While you have no control over the passage of time, you are in control of when your business start date is. What is the start date of your company? For a company, this is the date of incorporation. Even if your company is not yet making money, you can integrate it quickly at any time. Then, as you build your business, the clock is ticking for business time.
Funding ability isn't the only way to make your business more attractive to lenders, however.
Related: 3 Ways Alternative Loans Are Driving The Future Of Finance
What Lenders Are Looking For
Lenders have individual requirements, but some requirements are universal.
An industry they know
Not every lender is a generalist. Working with a lender who specializes in your industry will help, as they will know what you need. These lenders can be local or online. Do a search for "banks that lend ___". Fill in the blank with the name of your industry. You can find funding for anything from dog training to welder.
A business they know
However, if you are already a personal customer, a bank can easily look up your records. If they think you are managing your accounts well, well for you.
Good account management
Good account management for a company or individual means making consistent deposits. It means you don't overdraw your account and write checks for insufficient funds. It means keeping a minimum balance – often $ 10,000 or more is best. A positive cash flow, where you add more money than you subtract, is also vital. And don't forget, responsibility and professionalism will go a long way in turning a "no" into a "yes". & # 39;
Related topics: How will the second round of government incentives actually help me or my company?