People who own their own businesses nearly always face financial hurdles. It takes plenty of money to buy inventory, pay employees, and meet other important expenses. When your own cash flow is lagging, you may find it necessary to apply for financing through one of the Atlanta private commercial lenders near you. You can boost your chances of approval by knowing the lending criteria in place.
One of the first hurdles you might have to overcome involves passing the required credit check. If a lender relies greatly on credit, you will be asked to give your Social Security number and submit to a check to determine your credit worthiness. If your score is high enough, you will be approved. If not, you might be denied.
You also may be required to give details about how long your business has been in operation. Most lending companies prefer businesses that have been in operation for years rather than months. Long-established companies translate into solid customer bases that help bring money into the businesses.
When you have a steady client base, a lender will assume that you have plenty of accounts receivable. Your invoices can be used as collateral against a lien. The lender might purchase some of the invoices and then give you money based on those invoices' value. This lending process is known as factoring.
If you lack invoices, a company may still consider what assets you have free to put up against a loan. Assets that are free from liens can be appraised for their dollar value and used to secure the balance. If you default on the loan, the lender can then seize these possessions and sell them off to recoup the money that you owe it. Property, equipment, and inventory tend to be popular assets.
You may find it difficult to get financed if you are already overextended on loans. Too many loans can be a threat to your approval because a company will think you will be unable to pay your balance on time without financial difficulty. It helps if you pay off your balances to other creditors first before applying for a new loan.
When you knowing these details first, you can better your chances of approval from one of the private commercial lenders near you in Atlanta. The process can be intimidating when you lack this information upfront. However, being aware of what is expected of you can allow you to apply in a responsible manner.
One of the first hurdles you might have to overcome involves passing the required credit check. If a lender relies greatly on credit, you will be asked to give your Social Security number and submit to a check to determine your credit worthiness. If your score is high enough, you will be approved. If not, you might be denied.
You also may be required to give details about how long your business has been in operation. Most lending companies prefer businesses that have been in operation for years rather than months. Long-established companies translate into solid customer bases that help bring money into the businesses.
When you have a steady client base, a lender will assume that you have plenty of accounts receivable. Your invoices can be used as collateral against a lien. The lender might purchase some of the invoices and then give you money based on those invoices' value. This lending process is known as factoring.
If you lack invoices, a company may still consider what assets you have free to put up against a loan. Assets that are free from liens can be appraised for their dollar value and used to secure the balance. If you default on the loan, the lender can then seize these possessions and sell them off to recoup the money that you owe it. Property, equipment, and inventory tend to be popular assets.
You may find it difficult to get financed if you are already overextended on loans. Too many loans can be a threat to your approval because a company will think you will be unable to pay your balance on time without financial difficulty. It helps if you pay off your balances to other creditors first before applying for a new loan.
When you knowing these details first, you can better your chances of approval from one of the private commercial lenders near you in Atlanta. The process can be intimidating when you lack this information upfront. However, being aware of what is expected of you can allow you to apply in a responsible manner.
About the Author:
Tom G. Honeycutt is a full-time real estate entrepreneur in Atlanta, GA. Tom helps readers by providing practical and useful knowledge to better understand lending choices. If you are looking for Private Commercial Lenders in Atlanta, GA he recommends you check out www.ifundinternational.com.
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