A walkthrough on How to Get Money for Your Business. Faster and Easier than You Ever Thought Possible

1. How Anyone Can Get Approved for
Business Financing

2. www.CreditSuite.com/businesscredit
Ty Crandall
Director of Business
Services
(877) 600-2487
ty@creditsuite.com

3. Several Types of Business Financing
• Conventional Financing
• Private Money
• Alternative Financing

4. 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

5. 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

6. Let’s Take a Look at What is Needed
to Qualify for a SBA Loan

7. Conventional Financing (SBA Loans)
Qualifications
• 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

8. 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.

9. 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.

10. Conventional Financing (SBA Loans)
Qualifications
• Personal Background Information
• Resumes
• Business Plan
• Business Credit Report

11. 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.

12. 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.

13. Conventional Financing (SBA Loans)
Qualifications
• Business Lease
• Bank Statements
• Business Certificate/License
• Loan Application History
• Proof of Collateral

14. 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

15. Conventional Financing (SBA Loans)
Qualifications
Ownership and Affiliations – Include a list of
names and addresses of any subsidiaries and
affiliates, including concerns in which you hold
a controlling interest and other concerns that
may be affiliated by stock ownership,
franchise, proposed merger or otherwise with
you.

16. Questions Your SBA Lender Will Ask
• Why are you applying for this loan?
• How will the loan proceeds be used?
• What assets need to be purchased, and who
are your suppliers?
• What other business debt do you
have, and who are your creditors?
• Who are the members of your
management team?

17. If You are Purchasing an Existing
Business
• Current balance sheet and P&L
statement of business to be
purchased
• Previous two years federal income tax returns
of the business
• Proposed Bill of Sale including Terms of Sale
• Asking price with schedule of inventory,
machinery and equipment, furniture and
fixtures

18. Conventional Financing (SBA Loans)
Qualifications
• There is no question that SBA loans are tough
to qualify for
• This is why according to the Small Business
Lending Index, over 89% of business
applications are denied by the big banks

19. Conventional Financing (SBA Loans)
Qualifications
• Most business owners struggle to get approved for
financing because they and their business aren’t
“perfect” as the lenders and SBA require
• As a result most business owners don’t get the
funding they need and fail, go out of business, shut
their doors
• Per SBA lack of access to capital is one of the main
reasons for small business failure

20. Private Money

21. 3 Main Types of Private Money
• Equity Investors
• Private Financing
• Crowd Funding

22. 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

23. Equity Investors
• Investors will want to see value, such as a
product with patents
• In many cases they would prefer to see a
tested and proven concept over just an idea

24. 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 +

25. 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

26. Crowdfunding
• Crowdfunding is the collection of finance from
backers—the "crowd"—to fund an initiative
• Crowdfunding models involve a variety of
participants including the people or organizations
that propose the ideas and/or projects to be
funded, and the crowd of people who support the
proposals
• Crowdfunding is then supported by an organization
(the "platform") which brings together the project
initiator and the crowd

27. Benefits of Crowdfunding
• Crowdfunding allows good ideas which do not fit
the pattern required by conventional financiers to
break through and attract cash through the
wisdom of the crowd
• If it does achieve "traction" in this way, not only
can the enterprise secure seed funding to begin
its project, but it may also secure evidence of
backing from potential customers and benefit
from word of mouth promotion in order to reach
the fundraising goal

28. Benefits of Crowdfunding
• Profile – a compelling project can raise a
producer's profile and provide a boost to their
reputation.
• Marketing – project initiators can show there
is an audience and market for their project. In
the case of an unsuccessful campaign, it
provides good market feedback.

29. Benefits of Crowdfunding
• Audience engagement – crowd funding
creates a forum where project initiators can
engage with their audiences
• Audience can engage in the production
process by following progress through updates
from the creators and sharing feedback via
comment features on the project's
crowdfunding page

30. Benefits of Crowdfunding
• Feedback – offering pre-release access
to content or the opportunity to beta-
test content to project backers as a
part of the funding incentives provides
the project initiators with instant
access to good market testing feedback
• Another massive benefit of
crowdfunding is that owners retain
control of their operations, as voting
rights are not conveyed along with
ownership when crowdfunding

31. Alternative Business Financing

32. Alternative Business Financing
• There is a LOT of capital out there that business
owners can obtain
• And most of it, over 90% isn’t available through
big banks but through these types of
“alternative” funding sources

33. 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

34. The 3 C’s of Lending
• Cash flow
• Collateral
• Credit, good Personal or Business

35. 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

36. Cash Flow Financing Qualifications
• Does the business have existing
cash flow proven by bank
statements
• Does the business have over
$60k annually received in credit
card sales
• Does the business have over
$150k annually going through
their bank account

37. Cash Flow Financing
Revenue Lending
– Short term loan of 6-18 months
– Loan amounts up to 500k
– Loan amounts equal to 8-12%
of annual revenue
– Rates of 10-45%
– 500 credit score accepted
– NO collateral requirement

38. Cash Flow Financing
Merchant Advances
– Short term loan of 6-18 months
– Revolving lines-of-credit available
– Loan amounts up to 500k
– Merchant loan amounts equal to 1
month’s volume
– rates of 10-45%
– 500 credit score accepted
– NO collateral requirement

39. Collateral Based Financing

40. Collateral Based Financing
Acceptable collateral
– Account receivables
– Stocks, bonds, and other
securities
– Cash-on-hand
– Inventory
– Purchase orders

41. Collateral Based Financing
Acceptable collateral
– Equipment
– 401k
– Some real estate
– Floor plan
– Book of business

42. Account Receivable Factoring
• Up to 80% of receivables is forwarded
• 1 year in business required
• Must be receivables from another business
• Rates of 1.25-5%

43. Securities Based Lines of Credit
• 70-90% LTV
• Rates as low as 2-3%
• Working capital line-of-credit
• Challenged personal credit

44. 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
• Example is a factory or retail store

45. Purchase Order Financing
• $5,000-25,000
• Up to 95% of your existing purchase orders
• Letters of Credit

46. Equipment Sale-Leaseback
• Lender will undervalue equipment by possibly
up to 50%
• Major equipment only
• Lender won’t combine a bunch of small
equipment
• 1st and last month’s payments required
• Loans up to $2 million

47. 401k Financing
• 401k or IRAs can be used
• Up to 200% financing
• Rates usually less than 3%
• Steps
– A new corporation is formed
– A retirement plan is created allowing for
investment into the corporation
– Funds are rolled over into the new plan
– The new plan purchases stock in corporation and
holds it
– Corporation is debt free and cash rich

48. House Reseller
• 660+ FICO score
• Flipping experience required
• Must have cash on hand to put into escrow
• Up to 65% of after-repaired-value
• 8% rate or so, 6 month term

49. Floor plan Financing
• Revolving line of credit
• When each piece of collateral is sold by the
dealer, the loan advance against that piece of
collateral is repaid

50. Book-of-Business Financing
• Commissions from the book of business serve
as collateral
• Borrow 2-3 times annual renewal
commissions
• Long term loan

51. Credit Based Financing

52. Credit
• Good Personal Credit
– Unsecured credit cards with a
PG
• Good Business Credit
– Unsecured credit cards with
no PG

53. Unsecured Credit Cards- Good Personal
• Approval amounts from $10,000 to $150,000
• No consumer reporting, some business reporting
• Excellent personal credit with open revolving
credit
• Low inquires
• Approval amounts equal to
current limits
• 0-25% APR, 0% for 6-18 ,months,
9% success fee

54. Unsecured Credit Cards- Good
Business
• Approval amounts from $10,000 to
$50,000
• Report to business CRAs
• Take 6 months to build credit profile
• Personal credit not used for pre-
qualification
• Approval amounts equal to current
limits
• 0-25% APR, 0% for 6-18 ,months

55. Learn more about business credit at
www.CreditSuite.com/businesscredit
Ty Crandall
877-600-2487
ty@creditsuite.com