You have made it through the toughest 3-4 years of business; you have poured your energy, creativity and money into making your company sustain itself and grow. The start-up phase for any business is the most volatile time; lenders and creditors turn away from you when you feel like you need them most but the issue is, as statistics clearly support, your new venture is too risky to lend to.
Now it is 3 years later, you’ve survived, sales are being generated and you’re making money. You should be “bankable” right? Meaning, you should be able to approach a commercial lender for a loan or equipment finance at some amount and get approved. Most business owners would say “yes” but the real answer to the question is – it depends. It depends on how your business has operated during those initial years and what you plan to do with the money.
Here are 3 key points to consider when looking for business capital:
Being “bankable” really depends on several internal and external business and economic factors. Time in business alone will not guarantee an instant approval as many of us remember from years past. Lenders will evaluate and review your business operation, your objective for capital requested and the type of gear you intend to purchase as part of their approval process. Be aware of the factors involved so you can make changes where appropriate to increase the chances of getting funded more often.