If you’re small business owner and need working capital, there are multiple options available to you right now. If you’re listening to news reports telling you how tough it is to get a loan and not going to the bank to give it a try, you’re missing out on an opportunity. Banks and lending institutions have placed strict guidelines on residential mortgage lending because they were the source of the original lending crisis. Obtaining a commercial or small business loan is no more difficult than it’s always been.
There have been some changes, though. Applicants for loans are still required to present a personal credit score and many of those scores have taken a big hit in recent years. We’ve all suffered in this economic crisis in one way or another, and those difficulties show up in credit scores and credit reports, where there are more HULT PRIVATE CAPITAL late payments per capita than there have ever been. The standards of the lenders haven’t changed, so applicants with poor credit scores are often forced to go elsewhere.
Private capital is an option that small business owners are now exploring more frequently. A private investor will look at the overall company performance and not just the credit score and report of the owner. They evaluate the current financial situation, past successes and failures, and prospects for future growth and profitability. Private investors, in the course of doing their due diligence, actually do a more thorough job of evaluating your company, so you might have a better chance at getting the funding you need for your business to take the next step.
If your company has a history of defaulting on loans and not paying bills on time, you won’t get financing from anyone, public or private. Your first step, if you want to be approved for a loan at some point, is to clean up your act. Get things in order for six months and then take evidence of what you’ve done to a private investor to show that your company is on the right track. At that point, someone might take a chance on you.