The document discusses factors that determine business line of credit interest rates. The key factors are a business's finances, market prime rate, the personal credit score of the business owner, and the business's credit score. Having good finances, a credit score over 700, and a business credit score over 80 will help a business qualify for lower interest rates. The document also provides recommendations for funding a business, including starting with invoice factoring and considering other sources that report to credit agencies.

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4. The Number One Reason a
Business Fails

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• Lack of Capital
• Inadequate Management
• Weak Business or Infrastructure Plan
• Marketing Mishaps
Why Businesses Fail

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Comparing Brands With Capital vs Non
Capitalized
0
375000
750000
1125000
1500000
Top 150 Independents
712,000
978,000
623,000
1,430,000
Valuation AUV

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What determines business lines
of credit interest rates?
1. Business finances
Lenders want to see that you’re running a viable business, and will review your
company’s finances before making a decision and determining your interest
rate. They will look to see if your business is profitable and what your annual
revenues are. The better off your business is, the lower the interest rate will be
on your line of credit.
2. Market Prime Rate
Many lenders use the Market Prime Rate to determine their interest rates on
business loans. A Prime Rate is what lenders charge customers with excellent
credit. It serves as a baseline for lenders. The bigger the risk you pose as a
borrower, the farther away you’ll get from the Prime Rate.
As of August 22, 2019, the U.S. Prime Rate is 5.25%, but that number can
fluctuate over time.

11. 3. Personal credit score
Even though you’re applying for a business line of credit, lenders will
review your personal credit score. Your credit score is a number between
300 and 850. According to Experian — one of the three major credit
bureaus — a credit score of 700 or above is generally considered good
and will help you snag the lowest interest rates on a loan.
If your credit score is only fair or poor, lenders will view you as a risky
borrower. If you qualify for a line of credit, you may have to settle for one
with a very high interest rate.
4. Business credit score
Along with your personal credit score, lenders will also look at
your business credit score. Your business’ credit score is a number
ranging from 0 to 100 that ranks the creditworthiness of your company. If
you have a score of 80 or higher, your score is considered good, and
you’re more likely to qualify for a loan and get a competitive interest rate.
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What determines business lines
of credit interest rates?

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14. The Number One Reason a
Business Fails

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labs@foodabletv.com
Breakthrough Strategies
•Prep You and Your Business
•Develop a Banking or Trade
Relationship
•Start Small to Go Big

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Prep You And
Your Business
•Personal matters in
business

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Prep You And Your
Business
•Get your business
books in order
•Proper business
organization
•Good banking
relationship
•Multiple banks

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Prep You And
Your Business
•Build your personal
and business credit at
the same time
•Start with small line of
credit from short term
money vendors

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Develop Banking
& Trade Lines
•Trade lines how they
work
•Factor your Accounts
Receivable
•Build a basis for
accepting any deals no
matter how large

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Start Small To Go
Big
•Should you take
investors?
•Banks won’t fund my
business!
•What are secondary
funding markets

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Breakthrough Product
Review
Best Sources For Business Capital

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Things to consider
•Start with invoice factoring
•Rates are high - so start with small
amounts
•Prepare for weekly ACH

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Other Funding Options
• Shops your loan or funding
source from secondary
markets
• Be prepared for high rates
• Make sure the source
reports to the major credit
agencies
• Fast turnaround
• Great customer service
• Requires higher personal
credit - 700+
• Fast turnaround up to 500K
• Reports to the major credit
agencies
• Competitive rates
• Requires higher personal
credit - 600+
• Fast turnaround up to 500K
• Annual revenue 100K with
min 1 year in business
• Reports to the major credit
agencies
• Competitive rates 9.99 AIR*
* The AIR is the average amount of interest (expressed as a %) you pay each year on a
loan. It is calculated by taking the total interest and dividing it by the loan amount and
number of years borrowed.
* For example, if you get a $100,000 loan for 1 year with a total
interest cost of $10,710, the calculation would be $10,710 /
($100,000 / 1) = 10.7% AIR.

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