Are you ready to obtain business financing? Is your business “fundable”? 

Whether or not you are looking for business capital today, one day you will be. You have to be ready. There are some basic steps you can take to be prepared for funding now. 

For this reason, we have created a checklist of steps our Platinum members should complete to get your business ready for financing when the time arises. You may need access to capital quickly. Why not be prepared?

Things you need to do:

  1. Review your personal credit score to see what lenders see
  2. Review your business credit score to see what lenders see
  3. Gather the relevant current business documentation needed for lending applications such as:
    • Balance Sheet/Financial Statement
    • Income Statement (P&L)
    • Accounts Payable (if applicable)
    • Accounts Receivable (if applicable)
    • Inventory Report (if applicable)
    • Last Two Years of Business Tax Returns (if applicable)
    • Last Two Years of Personal Tax Returns
  4. Obtain a DUNS# with Dun & Bradstreet to increase credit opportunities
  5. Establish a business credit history and business credit score separate from your personal credit via established business vendor tradelines
  6. Establish an all-important business-banker relationship
  7. Put a basic business plan in place so you are more attractive to lenders

We have tools in place to help you with the steps listed.

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For steps # 1 and #2 we recommend a NAV membership.

NAV Membership

As a business owner, before applying for any financing, you should know what your personal credit reports and business credit reports contain. You want to “see” what the lenders will see before you apply. You will also want to have your financials updated (i.e., profit & loss statement, balance sheet, income statement, etc.).

Are you interested in monitoring your personal credit and business credit reports and scores? If so, please consider NAV.

What is NAV?

NAV is short for Net Asset Value and brings a new approach to how a small business owner deals with credit by combining the power of seeing multiple credit reporting bureaus for both personal and business credit in one place. 

NAV is the only online provider that provides you access to your personal credit scores from Experian and TransUnion and your full business credit reports from Dun & Bradstreet, Experian, and Equifax. Typically, you must pay $50.00-$150.00 to Dun & Bradstreet, Experian, or Equifax for a single business credit report. 

There are several different levels of NAV membership available. We recommend you start with the FREE account and eventually work up to the “Business Boostprogram.

Free NAV Account

What’s included:

  • Experian personal credit score and credit report – summary only
  • Summary only of business reports from Dun & Bradstreet, Experian, and Equifax.
  • Cash Flow alerts
  • 1-on-1 access to Credit & Lending Specialists

To sign up:  https://nav.nkwcmr.net/c/2632394/164102/2410

Business Boost ($39.99 mo.) RecommendedBuilds Business Credit

What’s included:

    • Full Experian and TransUnion personal credit reports and scores
    • Full business credit reports from Dun & Bradstreet, Experian, and Equifax.
    • Cash Flow alerts
    • 1-on-1 access to Credit & Lending Specialists
    • Ability to dispute errors on business credit reports
    • Full-service identity restoration with dedicated identity specialist*
    • $ 1 million identity theft protection (Coverage includes reimbursement for legal costs, loss of income, travel expenses, child care and fraudulent withdrawals).
    • Follow up to (5) business credit reports (Can be competitors, suppliers, etc.)
    • Lost Wallet replacement (One call and your dedicated specialist will cancel all lost cards, report missing documents, and initiate a fraud affidavit and police reports for stolen wallets)

Everything included in Business Manager account plus:

Build business credit with tradeline reporting (NAV reports your monthly payment to Dun & Bradstreet, Experian, and Equifax business bureaus to help establish a business credit history and score.
To sign up: https://nav.nkwcmr.net/c/2632394/901704/2410

For step #3, collect the documents listed and place them in a folder on your desk or file them digitally. Please be sure to update these documents on a regular basis. Reviewing financials ought to be something every business owner should do monthly. 

Don’t know how to keep books or generate balance sheets or income statements? Contact your Anderson Business Advisor and inquire on our bookkeeping services. https://bookkeeping.andersonadvisors.com/

Learn about NAV

For steps #4, #5, and #7, we have written an eBook on how to establish corporate credit. You may download a digital copy from the Platinum membership portal. It is located on the Anderson Funding Community page. Or you can email us at funding@andersonadvisors.com and request we send it to you via email.

For step # 6, we want to impress upon you the importance of building a banking relationship. Business lending is not all about money. It is about relationships.

Give great thought as to where you are going to open a business checking account. We suggest that you do not open an account at a “big box” national bank such as Bank of America, Chase, or Wells Fargo bank. Look for smaller regional and community banks. 

The larger banks are looking to make the larger loans of a million plus. They have little interest in the $50,000 to $250,000 dollar range that most smaller business owners are seeking and most importantly, can successfully pay back. 

You have heard the familiar adage that getting a loan requires proving you really don’t need one. It reflects the frustration and intimidation many business owners feel when seeking financing for their companies and initiatives. 

The simple reality is banks really do want to make loans. Lending is their primary source of revenue and by providing funding, they help make the communities they serve even better places to work, live, and play.

So, if businesses want to obtain loans and bankers are eager to lend money, why does there often seem to be a disconnect? Bankers state it nearly always comes down to relationships and the expectations both sides bring. Just as marriages, friendships, and life’s other relationships require a two-way street paved with cooperation and communication, a successful lender-business relationship demands a genuine commitment from both sides.

Developing that relationship benefits your company’s future because a banker is more than just a source of capital. With the right relationship, you gain a valuable sounding board. Like your attorney and CPA, your banker can provide candid responses to your questions and concerns. Bankers bring an objective viewpoint to inform your decision-making and can make sure you are looking at factors you may not have considered. They have a stake in your success, so it’s in their mutual interest to steer you clear of potential problems. But how many small business owners talk to their bankers on a quarterly or semi-annual basis? How often do you speak with your local banker?

Community bankers are not in business for one-and-done lending or selling notes immediately after closing. They have made a long-term commitment to the places they serve, and they intend to be around to finance your next initiative, facility, or acquisition and the one after that. That is why a good community banker really takes the time to get to know you, your business, your market, and your industry. They rely on that knowledge to make decisions about financing locally, instead of trusting algorithms or review committees located in other states.

Strong relationships demand cooperation and communication from both sides. How can you strengthen your own relationship with a lender? Start by being forthright. You do not like to be blindsided, and neither do they. For example, if you are contemplating a change in ownership, expecting to make a major asset purchase, or looking to divest part of your business, let them know. They may be able to structure your financing in ways that support your plans.

Please respond to requests for reports, statements, and projections in a timely fashion. Lenders are not asking for that information to make you work harder. If they notice something concerning, they want to be able to address it before it blows up into a bigger issue. And if you have bad news or uncomfortable information, do not hold back. Healthy relationships demand mutual trust.

Given that relationships are a two-way street, what should you expect from your banker? Frankly, you should expect a lot. For starters, you should expect what I just described: the banker investing plenty of time to get to know you and your business. The better they understand what makes your company unique, the better they can respond to your needs for financing. Be wary of lenders who reply to your initial inquiry with a specific offer. If they are not willing to take the time to get to know you and do not understand how you and your industry operate, how can they deliver proactive solutions for your goals, plans, and needs? Be choosy when selecting a bank to do business with. 

You should expect the banker to explain the lending process, including the steps that take place after you have submitted an application. How will your application be reviewed and what is the banker expecting to see? A business loan application should not be like a lottery ticket where you cross your fingers and hope you’re lucky. It is a business transaction for which you should have reasonable expectations. I mentioned the importance of being forthright with your banker, and you deserve the same treatment in return.

Finally, you should expect great communication from your banker, even when they do not need something. As you go through their approval process, the banker should keep you apprised of each step and what to expect. If you have questions or concerns, you should not have to wait days for a response. And when the banker asks you to supply additional documents, they should give you a reasonable amount of time to gather them and make it easier for you to submit them.

Does all this sound simple? It really is. A strong relationship between a business and its banker should be a living example of the Golden Rule. Treating each other the way you would expect to be treated makes for a satisfying and mutually beneficial relationship.

Make sure you meet with your banker a couple of times a year. If you expect you will need additional capital in the near future, speak with your banker. Find out what it takes to qualify. Be a proactive business owner. Establish a strong banking relationship and utilize their knowledge. It benefits you and your business in the long run. 

If the bank says no, where do you go?

If you have established a good banking relationship, and still get turned down, there are other funding options available. 

If you need advice or help with finding business financing, contact your Anderson Funding Community, funding specialist. 

We will conduct a free one-on-one funding consultation. We will determine what lender would be best for your funding request. We will contact that lender on your behalf. If they indicate they can fund you, we will introduce you. This way, you are only speaking with lenders that are familiar with your funding request and already indicated they can fund you.  

Make your appointment here:
https://calendly.com/anderson-funding-community/

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