There are some very specific things that any lender, whether it is a bank, a venture capitalist or other type of backer looks for in a business. Probably the very first thing is respectability found by looking for proper set up procedures, affiliations and identification numbers. Then of course the obvious: credit ratings. Here at Business Fundability, our goal is to help you develope a strong business credit rating for your business.
Above and Beyond the Numbers
There’s something equally important to the ratings and number involved in determining business fundability, and that’s stability. Businesses come and go in today’s economic environment. Lenders want and need to know that you will be around over the course of the loan. Since most loans take many years to pay in full, there’s a lot of investment involved on the lender’s part.
The best way to prove stability is to have a strong, reasonable business plan. A business plan maps out your course of action, lays your cost of operation bare so that you and your lender can tell how much it will cost to make a profit, and how reasonable those profits are. On top of that, a business plan gives a well-rounded overview of all of the people involved in your business and what their skills are to get you to where you need to be.
The Company You Keep
Lenders won’t stop at your business plan to find out how stable and respectable your business is. For real business fundability you need to establish good working relationships with other businesses and have a good reputation with your fellow business owners. If you have established clientele or customers it will show a good reputation with consumers as well. If you haven’t had a chance to develop any outside relationships with other businesses or developed a customer base yet, it will be harder to prove that your business is capable and reliable.
Banks are the Bottom Line
Yep, the banks hold the keys to your ability to get traditional loans. While your bank rating may not have a lot to do with getting funding from some sources such as venture capitalists, if you want a bank loan a high rating. Bank ratings aren’t anything like credit ratings. You can only establish a bank rating by opening a bank account.
It’s actually quite simple. Open an account in your business’ name using your EIN number for identification, deposit the minimum amount required by the specific account and keep your funds above that level at all times. Conduct regular business; paying your bills and depositing earnings into the account and within a few months you’ll have the start of your bank rating.
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