480-287-4240 mike@whoisaz.com

Lenders put different emphasis on which of the 5 C’s matter most to them.  And they adjust their rates and terms accordingly.  Without an expert on your side, it’s extremely difficult to find the best business financing, given the lenders are first going to offer the best terms and rates for themselves, while expressing their interest in your success, they intend to make  the most profit from the ‘deal’.  Somewhere in between the lines of fine print, lies the opportunity to negotiate.  It’s why I do what I do.  When the banks say no or offer onerous terms, or you’ve found alternatives to getting the cash, you need to know if you could save more on the cost of that capital.  It’s the difference of capital that builds a strong foundation, and a foundation with flaws.

5 “C”s

Number two on the list of 5 “C”s causes some doors to immediately close.  Number one and three are more important to many types of alternative lenders.

  1. Character
  2. Credit Score
  3. Capacity
  4. Capital
  5. Collateral

On the list of five “C”s your credit score is listed as number two, but in reality, it should probably be listed as number one. Although there is hope for business owners with less than stellar credit, the options come at a cost.  You don’t have to pay credit card interest to achieve great scores.” Using your credit card is not the same as carrying a balance on the card. The trick is to pay off the balance as soon as the card comes in. source: Lendio

That’s living in an ideal world, one of doing the right thing and nothing financial ever going wrong.  Being an entrepreneur entails employing capital, and being the last one paid no matter the season.  A lender who takes in the character of the person and the longer view of getting through the seasons is probably the kind of lender you hope for.  Risk tolerance is as different for the borrower as it is for the lender.  A borrower with a track record and a revenue stream is just what some alternative lenders are looking for.  It’s a safe bet when character is considered as well.

Bad credit (defined by FICO as a score of 300 to 629) is one reason loan applications are rejected; the approval rate of business loans from big banks was just 23.3% as of June 2016, according to Biz2Credit. But alternative lenders provide options. They emphasize the strength and operating history of your business rather than your credit. Be sure to carefully compare all of your choices, weighing terms and annual percentage rate. source: NerdWallet

By Alan Parker of Parker Financial Services


Photo by:PeteLinforth / Pixabay

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