The Business Loan Question That Still Haunts Me

The business loan question…

“Are you willing to give me your home if you fail?”

I got into online lending – giving unsecured business loans to business owners. But to fund my business, I needed $1 million in financing, and the only way I could get financing was through a hedge fund. I’ll never forget the managing partner asking me this question… “You’re approved for your business loan, however, are you willing to give me your home, if you fail?”

What was I going to say?

I had to say “yes”.

What choice did I have?

I can’t tell you how many times I woke up at 2 or 3 o’clock in the morning with the sheets soaking wet because I was sweating over whether I could make that month’s payment thinking about what if …

What if our marketing doesn’t work this month?

What if we were off in our projections?

What if something happens in the market we have no control over?

I don’t mind telling you I was nervous. You probably feel it too some nights. It’s tough. And it’s especially tough knowing that if things do fall apart it’s not just the business that will fail. Your business is your baby. That’s tough enough to think about losing. But to lose the roof over your head too? And risk your family’s income?

What do you say to your children when they ask, “Why can’t we go on vacation like everyone else?”

“Why can’t I go camping with my friends like last year?”

“Can I have new shoes?”

Every question is like a knife that cuts into you. Perhaps you’ve been in that situation. Or perhaps you’ve even wakened up in the middle of the night scared that you won’t be able to make your payments. Your mind races with thoughts of losing your family, your home, your car, and everything you worked so hard to earn.

Fortunately, it doesn’t have to be that way. So if anything were to happen to the business your personal credit is protected. We work with small and mid-size business owners just like you so you can get the small business loans you need. We took that initial $1 million and have now lent close to $100M to small and mid-sized businesses all across the country.

As a boutique and one of the best small business lenders, we basically have taken the big bank model and thrown it out the window.  It led us to become a top 10 business lender.

Absolutely Shocking… I want to be able to give you the advice that you just can’t buy. Trust me you won’t find this in any MBA program and I’d be shocked if your attorney or CPA could guide you through the process of getting a small business loan, let alone an unsecured business loan with no traditional personal guarantee.

I’m going to show you how to get started so you can finally begin to get the working capital you need – ultimately without putting your personal credit at risk! I’m going to share with you the absolute best way to get yourself and more importantly your business in a position to get a small business loan.

Whether it’s with Sunwise Capital or your local bank. The first question you have to ask yourself is, “How is business credit different from personal credit?”

Good question.

For most people, business credit is a mystery.

Credit profiles are created by 3 business credit bureaus about every business using the business name, address, and federal tax identification number (FIN) or the employer identification number (EIN) that you get from the IRS. Other creditors rely on your business credit profile to determine if they want to grant you credit and how much credit they’ll give. The Big 3 among the major business credit bureaus are Dun & Bradstreet, Experian Business, and Equifax Business.

The information provided to the bureaus is completely voluntary. No business is required to send it in so the bureaus may never receive all or even any information about your business credit transactions. You could go for years racking up business credit without any of it being reported to the bureaus – unless you know how the system works!

Business credit scores range from 0 to 100 with 75 or more considered an excellent rating. Personal credit scores, on the other hand, range from 300 to 850 with a score of 720 or higher considered excellent. Most creditors want to see a score of at least 680!

WARNING! Your score is based on more than just whether you pay your bills on time. It can also be affected by the amount of available credit, the length of time you’ve had a credit profile, the number of inquiries made on your credit profile, and more.

And the big mistake I see business owners make is that they use their personal information to apply for credit, leases, and business loans they’re going to use in their business. This drives down their personal credit score!

Let me explain.

The average consumer gets just one inquiry per year and has 11 credit obligations (7 credit cards and 4 installment loans). Business owners are not your average consumer. They carry both business and personal credit. This usually doubles the number of inquiries, which reduces their score. They also carry higher balances, which reduces their available credit – and their score even more. Meanwhile, they never build a business score that could help them access much-needed capital loans in the future.

Your comments are always welcomed and in the next few blogs, I’m going to break it down step by step. There are 7 steps to this process. I’ll be reviewing each one.

Next, step #1…

Visit http://www.sunwisecapital.com for small business loans.

Mark J. Kane is a successful entrepreneur and small business owner. He spent 17 years in the investment banking industry. As CEO of Sunwise Capital, he understands the challenges of building a business through equity, debt, and off-balance sheet financing.

Take Your Business Further With A Loan From Sunwise Capital