You have a big project coming up. You need working capital or want to order more inventory. Maybe you have needed repairs. There’s a variety of other scenarios that you may need cash for. You may be thinking about a cash advance lenders. Read the information below to learn more about considerations taken into account by underwriters.
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–How long you have been in business? Several programs are offered to small businesses like yours. Each of them have different guidelines as to length of time in business. An average would be 6-9 months (minimum) in business with the same owner.
–Daily balances- Your bank statements for your business play a big part to your approval with non-collateral style loans. One of those is your daily average balances. Negative days should be absent or minimal. Same thing goes for NSF’s (non-sufficient funds).
–Deposits- Something else a lender will look for is the amount of your deposits and the number of times you make deposits into your business account. This does not include transfers from your other bank account. They want to see that you are regularly making deposits that resulted from doing business.
–Tax Liens and Bankruptcy. If you’re a candidate for receiving capital, liens and bankruptcy are taken into account when deciding, as it marks you as high risk.
–Criminal history- This is a flag to lenders and you will likely not be funded.
–Field of business- There are certain industries that some lenders will not provide capital for. Acceptable industries vary. Ask your business adviser about this.
–Lowered or stopped payments- If you have or had a loan that you lowered or stopped payments on, lenders will be skeptical about lending you money. Their fear being a similar outcome, particularly a loan that doesn’t require collateral.
–Debt to income ratio- If you have a large percentage of your money being paid out for other loans, a respectable company will not lend you money. This is irresponsible and sets you up for failure or default.
–Credit score- Like most loans, your credit score plays a big part in determining if a lender will take a risk on providing your business funding.
Be transparent when you speak to the business adviser about acquiring capital. It will save you and them a ton of time and frustration.