Venture Financing

Debt vs. Equity

  

How to obtain a commercial loan for your business

Establishing a Good Credit Rating

  

By: Venture Planning Associates

  

 

If you have not already done so, obtain copies of your personal credit history from the various reporting agencies in your area and be sure to include the national services such as TRW and Equifax. Also obtain a copy of a Dun and Bradstreet Report on your business. These will give you valuable insights into your potential for obtaining financing.

  

Dealing with Banks

Steps to Open a Business Bank Account

Forms of Loans

  

 
 

If there are errors, omissions or incorrect entries, each agency will provide you with a means of correcting these items. Many times, a divorce, natural disaster, or major economic recession where your customers left you large un-collectible fees have caused you problems. You are allowed to have each agency place your letter of explanation in the file so that it becomes public record.

 

 
 

Note: do not fudge here; filing a false financial statement can have serious criminal consequences.

Credit cards, while a valid need in today's society affects your credit rating, even if they have a zero balance. The bank must consider that a potential liability even though it is unused. So $100,000 in available credit at the 19.8% level on your cards can prevent you from obtaining a much lower interest rate loan at the bank. Establish a credit line with your bank and then eliminate the cards.

  

Ideas for Funding Your Startup Business

Real Ways To Finance Your Startup

What Does the Bank Look for in Making a Decision

4Cs of Lending

  

 
 

To establish or re-establish your credit rating, first find a commercial lending officer you can work with comfortably.

Next arrange a small business or personal loan and pay it off early. Continue this process with two other banks in your area.

If you can get all three loans at once, simply use the money from one to pay off the others.

 

 
 

You can use this technique to obtain progressively larger loans. At one point in the future, you may be able to get a signature loan for $100,000.

  

Have a Professional Business Plan

  

 
 
 

Real Ways To Finance Your Startup

What Does the Bank Look for in Making a Decision

Relationship Banking

Documentation Required to Process a Commercial Loan

After the Loan: Maintain Good Communication with the Bank