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How to Get Business Loans Even with Bad Credit No Collateral and No Cash Flow
1. How to Get Business Loans…
Even with Bad Credit,
No Collateral, or No Cash Flow
2. The Cash Access Problem
• Most business owners go to their bank when
they need money
• But according to the Department of Revenue,
less than 2% of all business loans come from the
big banks
3. The Cash Access Problem
• Banks deal with very conservative risk
• And business lending is VERY risk as
over 90% of businesses fail within their
first 10 years
• The result is that 89% of business bank
applications are typically denied per the Small
Business Lending Index
• This is also why Bloomberg says “Funding a new
small business? Don’t bother with banks”
4. The Cash Access Problem
• Even though most struggle to get money, 86% of
small businesses rely on some type of credit or
financing for survival per the National
Federation of Independent Business
• And per SBA… the major reason for business
failure is insufficient capital and lack of
adequate funding
5. The Cash Access Problem
• And since most small businesses can’t easily get
money, that leaves over 9 million American
businesses that need money and can’t get it,
according to the National Small Business
Association
• Are you one of the 9 million who need money
and can’t get it?
• If so, you’re going to love what you’re about to
learn!
6. The Cash Access Problem
• If you’re looking for money for your business,
there’s great news
• There’s actually billions of dollars to be lent to
small businesses
• BUT, most of this money will NOT come from the
big banks
• The real problem isn’t that there
isn’t money to borrow, it’s that
most business owners don’t know
WHERE to go to get approved
7. Conventional Financing (SBA Loans)
Qualifications
• All of the big banks and most smaller
banks use SBA loans as their primary
business funding program
• These types of conventional bank loans are very
hard to qualify for as the borrower must qualify
per SBA guidelines and the lender’s guidelines
8. Conventional Financing (SBA Loans)
Qualifications
• SBA loans are also tough to qualify for
because the lender and SBA will evaluate ALL
aspects of the business and the business
owner for approval
• To get approved all aspects of the business
and business owners personal finances must
be near PERFECT to ever get approved
9. Conventional Financing (SBA Loans)
Qualifications
• To get approved for conventional
loans you must have:
• Excellent personal credit, with no derogatory
reported items
• Excellent bank credit, keeping over $10,000
liquid in your accounts
• Excellent business credit with a Paydex score
of 80 or above
10. Conventional Financing (SBA Loans)
Qualifications
• You’ll need to have excellent financials that
show good net profits increasing from year to
year
• You’ll need to show you manage that cash flow
good per your business and personal bank
statements
• And you’ll need substantial collateral
to offset what you’re borrowing,
sometimes equal to 100% of
what’s being borrowed
11. Conventional Financing (SBA Loans)
Qualifications
• Other items you’ll need to provide for approval
include:
• Profit and Loss (P&L) Statement
– This must be current within 90 days of your
application. Also include supplementary
schedules from the last three fiscal years
• Current and Projected Financial Statements
– Include current and a detailed, one-
year projection of income and
finances and attach a written
explanation as to how you expect to
achieve this projection
12. Conventional Financing (SBA Loans)
Qualifications
• Business Certificate/License
– Your original business license or certificate
of doing business. If your business is a
corporation, stamp your corporate seal on the
SBA loan application form
• Loan Application History
– Include records of any loans you may have
applied for in the past
13. Conventional Financing (SBA Loans)
Qualifications
• Income Tax Returns – Include
signed personal and business federal income tax
returns of your business’ principals for previous
three years.
• Résumés – Include personal résumés for each
principal.
14. Conventional Financing (SBA Loans)
Qualifications
• Personal Background Information
• Business Plan
• Business Credit Report
15. Conventional Financing (SBA Loans)
Qualifications
• Income Tax Returns:
Most loan programs require applicants to submit
personal and business income tax returns for the
previous 3 years.
• Business Overview and History
– Provide a brief history of the business and its
challenges. Include an explanation of why the SBA
loan is needed and how it will help the business.
16. Conventional Financing (SBA Loans)
Qualifications
Personal Credit Report: Your lender will
obtain your personal credit report as
part of the application process.
However, you should obtain a credit
report from all three major consumer
credit rating agencies before submitting
a loan application to the lender.
Inaccuracies and blemishes on your
credit report can hurt your chances of
getting a loan approved. It’s critical you
try to clear these up before beginning
the application process.
17. Conventional Financing (SBA Loans)
Qualifications
• Business Lease
• Bank Statements
• Business Certificate/License
• Loan Application History
• Proof of Collateral
18. Conventional Financing (SBA Loans)
Qualifications
• Legal Documents: Depending on a loan’s specific
requirements, your lender may require you to submit
one or more legal documents. Make sure you have the
following items in order, if applicable:
• Business licenses and registrations required for you to
conduct business
• Articles of Incorporation
• Copies of contracts you have with any third parties
• Franchise agreements
• Commercial leases
19. Conventional Financing (SBA Loans)
Qualifications
• WOW, that’s a lot of stuff!
• As a result most business owners struggle to get
approved for financing because they and their
business aren’t “perfect” as the lenders and SBA
require
• They don’t have collateral, cash flow, and the
credit needed for approval
20. How to Get Approved for Business
Financing
• The great news is there are a lot of funding options
outside of these conventional bank, SBA loans
• Alternative financing is one of the most popular
options available today
• You can also get private money, or crowd funding
• You can even get business credit regardless of your
personal situation
22. Business Financing Based on Strengths
• Most alternative sources will lend you money
based on your business strengths
• So as long as you have a strength, you can be
approved
23. The 3 C’s of Lending
• The 3 strengths you’ll need one of to
get approved include:
• Cash flow
• Collateral
• Credit, good Personal or Business
24. Cash Flow Financing
• Cash flow financing is one of the most popular types of
business financing today
• Most ads relating to getting business financing with bad
credit, and no startups, is a form of cash flow financing
• The two most common types of cash flow financing are
– Merchant Advances
– Business Revenue Financing
25. Cash Flow Financing Qualifications
• To get approved for cash flow financing you’ll
need to be able to show 6 months of business
bank statements and merchant statements
• Those bank statements must reflect that your
business make over $120,000 in annual
REVENUE, or about $10,000 monthly
• You can also get a merchant advance
with $5,000 in credit card revenue
monthly
26. Cash Flow Financing Qualifications
• You need to be in business for one year to qualify
• You’ll need to have more than 10 transactions, or
deposits per month into your business account
• You can’t have more than 10 NSFs (non-sufficient-
funds charges)
• You should have some sort of balance left at the
end of each month
27. Cash Flow Financing
Revenue Lending and Merchant
Advances
– Short term loan of 6-18 months
– Loan amounts 10k to 500k
– Loan amounts equal to 8-12%
of annual revenue
– Rates of 10-45%
– 500 credit score accepted
– NO collateral requirement
28. Cash Flow Financing Benefits
• Personal credit isn’t a big factor of qualification,
if you’re not currently in trouble now, such as
being in a bankruptcy or having recent
judgments or liens
• You can get money super FAST, in as little as 72
hours
• Approval is easy, just a quick bank statement
review
29. Cash Flow Financing Benefits
• You can easily renew your advance
and get more money within 24-48
hours with a review of 2 months bank
statements… once you’ve paid down
50% of your initial advance
• You can get approved when you’d get
denied with most other sources, this
is just one of the most forgiving
business lending options available
today
30. Equity Investors
• Contribute money in exchange for a percentage of
equity, or ownership, in your company
• Think Shark Tank
• Percentage of ownership based on risk, typically
20-60%
• Is a viable option for startups as no tax returns are
typically required, the “idea” might be enough to
attract an investor
31. Private Financing
• Serves as SBA fall-out financing for loans that are
close, but can’t qualify for SBA
• Collateral is required, although often only 10-30%
• Tax returns are required for 2 years, so no
startups
• An Executive Summary is required
• Lenders are looking for average credit of 650 +
32. Private Financing
• Loans can be in the millions, even billions of
dollars
• Loan times take 30-90 days to close and
receive funds
• Interest rates are usually 7% + depending on
risk
36. Account Receivable Factoring
• Up to 80% of receivables is forwarded
• 1 year in business required
• Must be receivables from another business or
the government
• Rates of 1.25-5%
37. Securities Based Lines of Credit
• 70-90% LTV of stock value
• Rates as low as 2-3%
• Working capital line-of-credit
• Challenged personal credit is
okay
38. Inventory Loans
• Minimum inventory loan amount:
$150,000
• General loan to value (cost): 50%; thus,
inventory value would have to be
$300,000 plus
• No lumped together inventory, like office
equipment
• Rates are normally 2% monthly on the
outstanding loan balance
• Examples of companies that might
qualify include a factory or retail store
39. Purchase Order Financing
• $5,000-500,000
• You can get up to 95% of your existing
purchase orders advanced
• You’ll be issued a Letter of Credit
40. Equipment Sale-Leaseback
• Borrow against existing equipment you own IF
you don’t already have a lien
• Lender will undervalue equipment by possibly up
to 50% to determine a “fire sale” value
• Major pieces of equipment only, lender won’t
combine a bunch of small equipment
• 1st and last month’s payments required
• Loans up to $2 million
41. 401k Financing
• 401k or IRAs can be used
• Up to 100% financing
• Rates usually less than 5%
• You are basically investing your 401k into your own
business, instead of buying stocks in other
businesses
• There are no tax ramifications, based on proven IRS
strategies
42. House Flipper Financing
• 660+ FICO score
• Flipping experience required
• Must have cash on hand to put into escrow
• Up to 65% of after-repaired-value
• 8-18% rate , 6 month term
43. Commercial Real Estate Financing
• $75,000-20,000,000 loan amounts
• Get up to 55% loan-to-value for refinances
• 20-30 year loans
• Rates of 4-8%
• 650 FICO score needed for approval
• Conventional and SBA 504 loans are
available
44. Floor plan Financing
• Use an inventor of cars to get a revolving line of
credit
• When each piece of collateral is sold by the
dealer, the loan advance against that piece of
collateral is repaid
45. Book-of-Business Financing
• Commissions from the book of business serve
as collateral
• Only for insurance agents
• Borrow 2-3 times annual renewal
commissions
• Long term loan
• Easy to qualify for,
references are needed
46. Sign and Wrap Financing
• Get financing for a graphic vehicle wrap or
commercial signage
• Loans range from $1,500-50,000
• 3-12 month terms
• 620 FICO or higher needed for approval
• Rates range from 8-12%
48. Unsecured Business Credit Cards
• Approval amounts from $10,000 to $150,000
• Business credit reporting
• Excellent personal credit with open revolving
credit, low inquires, and utilization under 30%
• Approval amounts equal to current limits
• 0-25% APR, 0% for 6-18 ,months, 9-12% fee
• Personal Guarantors are okay
49. Business Credit
• No personal credit check or guarantee… in most cases
• No cash flow or collateral requirements
• Reports to business bureaus linked to your EIN
• Immediate vendor approval, 30-90 days for
store credit, 120-180 days for cash credit
• Cash credit limits can exceed $30,000
• Great “catch all” for those who don’t have a
strength such as cash flow, collateral, or
credit
50. Contact Us Today to Learn More About…
How to Get Business Loans…
Even with Bad Credit,
No Collateral, or No Cash Flow
