Most borrowers will say the process is too complicated and customer service is deficient. I don’t agree.
I have served as an intermediary between borrower and lender for many decades.
I have always represented the borrowers, business owners and real estate developers, mainly in the debt market. I know the requirements are stringent. They should be. If you are a first time business borrower and the lender is going to provide a loan to a business that may or may not have collateral to support the loan, the lender wants to know about the history of the business and the potential for growth.
There is a great deal of information needed to satisfy the underwriters, the loan committee and the regulators. If that information is provided in a timely organized fashion, a loan can be closed very quickly.
Of course you should work with an experienced loan officer who is customer oriented.
Small business owners whose businesses are expanding need the working capital for their growth.
Satisfying the requirements of a bank is a temporary, full time job.
If it is done efficiently a working capital loan can close and be funded in less than two weeks. I make this statement based on first-hand experience. It takes a bit longer for a term loan and an SBA guaranteed loan, but the process can be streamlined if the borrower collects the required documents and submits a complete package.
Many of the delays in processing the loan request are due to the borrower’s inexperience in working in the debt market.
Personal credit report from one of the three credit agencies
I recommend you request a current personal credit report from one of the three credit agencies – Equifax, TransUnion and Experian prior to contacting a lender. If you are seeking a loan with the best market interest rate and you have an established business with tax returns, you will need a personal credit score of 680 or higher.
Otherwise you will have to seek alternative lending at higher rates. All owners of the company with a 20% or more ownership will be required to guarantee the loan.
I have not defined the number of years that a company must be in business to qualify for a loan, because this can vary with the type of loan, the size of the loan request and the relationship with the specific lender.
Your first appointment should be with the banker who currently handles the business accounts for your company.
Next- You will always need to provide the follow information
About the author
Marjorie Weber has been educating entrepreneurs and guiding them in their search for capital for the past 16 years: combining business training programs with one-on-one mentoring. Marj is currently a financial advisor for Florida SBDC at FIU. She was Chair of SCORE Miami Dade from 2010 to 2014. She also serves as an advisor to the Goldman Sachs 10,000 Small Business Program and the SBA Emerging Leaders Program and provides training for Veterans seeking an entrepreneurial path upon retirement from the service. She has been facilitating workshops under the auspices of Miami Bayside Foundation for the past 3 years. She commenced her career as a real estate investment banker in New York and Miami.She uses these long term relationships to assist her clients in accessing capital. She knows both the process and the people and has assisted in providing financing for hundreds of businesses in Miami Dade.