Risky SIC Codes in a Recession: The Ugly Truth of Risk and Skittish Lenders

Risky SIC Codes –Will Your Business Be Denied Funding?

All businesses can potentially have problems getting loans during a recession. This is the nature of an economic downturn – funding tends to dry up. Higher-risk businesses have problems even in the best of economic times. But when you put them both together, you get risky SIC codes in a recession.

If funding possible at all? While SIC codes may or may not matter for SBA Paycheck Protection Program funding, they do matter elsewhere.

Do you know which SIC codes get you denied? But before we go any further, just what is a SIC code, anyway?

Risky SIC Codes in a Recession: SIC Codes

The SIC Code (Standard Industrial Classification) is a part of a business classification system.

A Standard Industry Classification code, or SIC is a four digit numerical code which is assigned by the U.S. government to businesses, to make it easier to identify the primary activity of the business. It is an indicator of the kind of business a company is in.

The Securities and Exchange Commission developed this system. For example, if your company makes tires and/or inner tubes, then your SIC code would be 3011. The numbers are somewhat intelligent in that there are ranges of industry groups which correspond to the first of the four digits, such as manufacturing corresponds to four-digit SIC codes which start with either a 2 or a 3.

The combination of the first and second digits then defines the major industry group. In our example, 30 will designate ‘Rubber and Miscellaneous Plastic Products’.

The SIC code’s digits are grouped to identify the industry and industry group. The first two digits in the SIC code identify the major industry group, the third digit identifies the industry group and the fourth digit identifies the industry.

The IRS

In fact, the Internal Revenue Service will use the SIC code that you select. This is in order to determine if your business tax returns are comparable to the other businesses in your industry. Hence, if your tax deductions do not reasonably resemble the other businesses in your industry, your business could be audited.

Furthermore, some companies may be labeled high-risk when they do not select the right SIC codes to classify their company. However, if you understand how the business classification system works, then you can choose the correct code on your first try.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

Risky SIC Codes in a Recession: NAICS Codes

The North American Industry Classification System (NAICS) is another business classification code.

This code classifies business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy. NAICS industry codes define establishments based on the activities in which they are primarily engaged.

The NAICS puts out its own list of high-risk and high-cash industries. Higher risk industries on the list include casinos, pawn shops, and liquor stores, but also automotive dealers and restaurants.

OSHA requires injury and illness reports from certain high-risk industries.

Restricted industries (automatic decline) include:

Ammunition or Weapons Manufacturing; wholesale and retail.
Bail Bonds
Check Cashing Agencies
Energy, oil trading, or petroleum extraction or production
Finance: (Federal Reserve Banks, foreign banks, banks, bank holding companies,
loan brokers, commodity brokers, security brokers, mortgage brokers, mortgage bankers, mortgage companies, bail bond companies, or mutual fund managers).
Gaming or Gambling Activities
Loans for the speculative purchases of securities or goods.
Pawn shops
Political campaigns, candidates, or committees
Public administration (e.g., city, county, state, and federal governmental agencies).
X-rated products or entertainment

High-Risk Industries (subject to stricter underwriting guidelines):

Agriculture or forest products
Auto, recreational vehicle or boat sales.
Courier services
Computer and software related services.
Dry cleaners
Entertainment (adult entertainment is to be considered restricted).
General contractors
Gasoline stations or convenience stores (also known as c-stores)
Healthcare; specifically nursing homes, assisted living facilities, and continuing care retirement centers.

More High-Risk Industries

Special trade contractors
Hotels or motels
Jewelry, precious stones and metals; wholesale and retail.
Limousine services
Long distance or “over-the-road” trucking.
Mobile or manufactured home sales.
Phone sales and direct selling establishments
Real estate agents/brokers
Real estate developers or land sub-dividers
Restaurants or drinking establishments.
Software or programming companies
Taxi cabs (including the purchase of cab medallions) .
Travel agencies

Risky SIC Codes in a Recession: Which Code is in Use?

They both are. However, the SIC code system is phasing out and NAICS will replace it. But for the moment, assume they are both in play, as the transition has not yet finished. These coding systems are similar but not identical.

Lenders, banks, insurance companies and business credit reporting agencies use the two business classification systems to determine if your business is a high-risk industry classification. This means that you could get a denial for a loan or a business credit card based on your business classification. Some SIC codes can trigger automatic turn-downs, higher premiums, and reducing credit limits for your business.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

Risky SIC Codes in a Recession: Risks

When considering any aspects of a business, risk has to be a major factor. There are inherent issues in every single industry. Crops fail, lease terms go up too high so a company has to move, or tariffs or even a war make importing less reliable.

But some businesses are considered to be risky by their very nature. And this is the case even if everything else goes off like a hitch and the business is prospering. Risk is inherent within these business types. Therefore, even if your business doesn’t feel risky, it just might be anyway.

Why Risk Matters

The biggest reason why risk matters has to do with funding. There are several industries where lending institutions are hesitant to do business. In those particular cases, there are stricter underwriting guidelines. But at least a company can get funding.

Not so with other industries. In some industries, no funding is available at all. As a result, those businesses will need to find other solutions for financing. These solutions can include, potentially, crowdfunding, angel investors, venture capital, business credit building and more.

Still, a lot of businesses would rather work with lenders. But where are lenders’ ideas of the magnitude of risk coming from?

Risky SIC Codes in a Recession: Real Injury Risks According to the CDC

In 1999, the Centers for Disease Control published an article on risks in small businesses. This article contains information on SIC codes. And it gives information on injuries associated with the codes. While this is not the true means by which lending institutions decide on risk, it is still of interest. And it can demonstrate what may be behind some of the reasoning.

Part of the calculation of risk comes from occupational injuries. These are such as those noted in the CDC report. But the other side of the risk coin is occupations which are high in cash transactions. After all, a pawn shop might not have much of a specific risk of injury at all. But the large amounts of cash normally associated with one mean that it can be a tempting target for thieves.

Risky SIC Codes in a Recession: Choosing Better SIC Codes

The choice of SIC code is yours. For automotive sales, for example, you would normally select 5511, ‘Motor Vehicle Dealers (New and Used)’. But most lenders will automatically turn your business down because of the high-risk factor within the business classification name. Of course you want to be honest with your SIC coding classification. But if more than one SIC code could apply, there is nothing wrong with choosing the SIC code which will not get you denied by lenders.

Therefore, if you want to have your automobile sales company, you need to develop a business code which has auto and home supply stores, motor vehicle parts and accessories, or car washes written in the actual business code. That way, you can still operate your real business of “automotive sales” without actually being considered a risk factor.

There is nothing deceptive or dishonest about doing this.

Check the SIC code database for more information on these codes.

Demolish your funding problems with our rock-solid guide about 27 killer ways to get cash for your business.

Risky SIC Codes in a Recession: Choosing Lower-Risk Business Names

Beyond coming up with the perfect memorable name which is easy to spell and say, and evokes your company’s mission statement, there’s also the matter of risk. Adding a risky business type into your business name will trigger financing denials.

For example, bail bonds are a restricted industry. So are many types of financing business types, and check cashing agencies. Hence naming your venture Chico’s Bail Bonds is a recipe for a delay if not an outright denial.

But it is the same as with choosing a lower-risk SIC code when two apply. There is nothing deceptive, illegal, or unethical in naming your company Chico’s.

Will this more generalized name guarantee funding for your business venture? Of course it won’t. But at least your business will not be automatically turned down before you can make your case for funding.

Risky SIC Codes in a Recession: Takeaways

Choosing the incorrect SIC codes could end up costing your business and get you labeled as high-risk. And this could directly impact your insurance premiums, your financing ability, and even your credit limit recommendations. This small error of choosing the wrong SIC codes could cost your business in the future. Therefore, be sure to do your research before you select any SIC codes for your business. Because you might just end up choosing risky SIC codes in a recession. And those could get you a denial. And it does not have to be that way.

The post Risky SIC Codes in a Recession: The Ugly Truth of Risk and Skittish Lenders appeared first on Credit Suite.

Angel Investors in a Severe Recession

Angel investors can be your saving grace when you are looking for business funding – even now. Sometimes they are willing to lend money when other banks and financial institutions simply will not. This could be a godsend during the 2020 severe recession.

There’s no question. The world has changed. The novel coronavirus has really thrown a monkey wrench into things. Right now, business owners are more concerned than ever before. Many are uncertain of what to do. It’s a time to be wondering about how to get the capital you need to grow, and whether it’s possible to survive and thrive. Don’t let COVID-19 get you down – you can!

And conditions are changing at breakneck speed. Many states already have shelter in place orders. Or even quarantines. Stores are having trouble keeping stock on the shelves. Customers and prospects are getting jittery. Fortunately, angel investing can still happen. In the 2020 severe recession, angels might want a safe haven for their money. And they might want to invest in hope.

Beat The 2020 Severe Recession: A Look at Angel Investors for Startups and More

Business Financing in the 2020 Severe Recession

Per Fundera, the number of United States financial institutions and also thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the marketplace in addition to deregulation in the 1990s, decreasing obstacles to interstate banking.

Assets focused in ever‐larger financial institutions is troublesome for small business owners. Big banks are a lot less likely to make small loans. Economic downturns imply banks become a lot more cautious with financing. Thankfully, business credit does not rely upon banks.

But getting the working capital you need to grow your business doesn’t have to be too difficult. You may be trying to find business loans. But there’s another way.

Many companies these days turn to this form of financing. And these options can work for startup ventures. But there are details you should know.

What Are Angel Investors?

According to Investopedia, the angel investors definition is:

“… [They] invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.”

These investors are usually only in for a one-time deal. Many do not lend to the same person twice, even if that person paid them back perfectly.

They choose to spread their risk out over many people and many businesses to insure they get a safe return on their investment.

Angels tend to be a lot more informal than most types of funding. They can be people you know. Or they can be people you connect with through networking or other means. And yes, your mom can be one, too.

History of This Type of Investing

The term comes from Broadway theater. Angels were originally the investors who backed plays. And they still do so. They are also called patrons of the arts.

What frustrates you the most about funding your business during a severe recession? Check out how our free guide can help.

Who Can be This Kind of Investor?

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. But a lot of them are accredited investors anyway.

What is an accredited investor? It has to do with money. To become an accredited investor, an person has to have a minimal net worth of $1 million, and an annual income of $200,000.

Who Else Can be This Kind of Investor?

There are a number of angels who aren’t millionaires. They could be friends or colleagues sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you don’t know so well. If you’re asking, where are angel investors near me, they could be people you grew up with or have done business with.

What do Angel Investors do?

They are informal investors, and they generally invest in the start of a company. This is in exchange, usually, for equity. They can even invest via a crowdfunding platform.

What Sorts of Risks Would These Investors Take on During the 2020 Severe Recession?

These are investors who often seed startups. If those startups fail in their early stages, they will lose their investments completely. Therefore, professionals will look for opportunities for a defined exit strategy, acquisitions, or initial public offerings (IPOs).

Just like anyone else, they don’t want to take any losses they can help, especially during the 2020 severe recession.

What Sorts of Returns do These Investors Normally See?

The effective internal rate of returns for an angel investor’s successful portfolio runs from 20 – 30%. This is a higher rate than banks will take. But bank loans and credit are often not an option for startups. As a result, these kinds of investments can be ideal for entrepreneurs who are still financially struggling during the startup phase.

How Do You Find These Types of Investors?

The best way how to find these kinds of investors is to ask. Or try an angel investors website or an angel investors network. A way how to angel investors online is to try Gust, which used to be called Angel Soft. They keep a database of investors, companies, and programs. Startups can also search for business plan competitions and more. This can be a convenient way to get funding during the 2020 severe recession.

Working with Gust

Look up investment groups, this includes a profile with information on which industries they typically fund. To look up programs, this includes deadlines and basic information like the dollar amount they fund. If you look up companies, the data includes a profile where the founders can add basic data and a pitch video.

Gust gives the search for these kinds of investors more organization. But it’s not the only way to find angels

Other Ways to Find These Sorts of Investors During the 2020 Severe Recession

Entrepreneur Magazine suggests angel investors list sites like Funding Post and ACE-NET. They also suggest trying every possible investor because being turned down by 100 investors doesn’t mean the 101st will turn you down. Entrepreneur notes that these kinds of investors will often start small. So, if you can prove your concept to them, and they start to see success, they might add more funding.

What frustrates you the most about funding your business during a severe recession? Check out how our free guide can help.

The Biggest Groups For These Sorts of Investors

You can also look at the biggest angel investor groups. But be aware that these meetings are really only going to happen if you can get an introduction.

According to Entrepreneur, in order from smallest to largest:

New York Angels Inc.
Alliance of Angels (Seattle)
Pasadena Angels
Hyde Park Angel Network (Chicago)
Band of Angels (Menlo Park, CA)
North Coast Angel Fund (Cleveland)
Golden Seeds LLC (NYC)
Investors’ Circle (San Francisco)
Tech Coast Angels (Los Angeles) and
Ohio Tech Angel Funds (Columbus, OH)

Groups’ focusing and requirements vary; some concentrate on local startups only. Read up before you ask; don’t waste yours and the angels’ time if there won’t be a fit.

What are Affiliated and Unaffiliated Angels?

Affiliated angels are people you know, such as friends and family, plus coworkers, managers, and employees. Customers, suppliers, vendors, and even competitors can be angels.

And given that there is still a huge gender gap when it comes to this sort of funding, ask women in your area. That way, you can help to increase the number of women angel investors out there. And that’s a good thing.

Unaffiliated angels are the people you don’t know, such as area professionals, entrepreneurs, or middle managers unsure about their financial futures, looking for an investment. Unaffiliated investors are likely to, obviously, need more assurances from you than the people you know will.

How can a Company get Angel Investing?

Companies can connect to affiliated persons by just asking. Companies connect to unaffiliated people in much the same way they can connect to other people who can help them who they don’t know, or don’t know well. This can be accomplished via cold calling, advertising, or working with business brokers. Plus there’s the old standby – intermediaries and networking.

The Pros Of Working With These Sorts of Investors in a Severe Recession and Otherwise

Interest rates and fees with this kind of investors can also be very favorable, sometimes better than bank rates and terms.

Even though US angel investors are a great source of business funding, there are some things you want to be cautious about before you commit with an investor.

Despite their name, these sorts of investors are not there to rescue the business. These investors are usually businesses or individuals who have money to lend but expect to take a safe risk and earn a decent return on their investment.

Angel Investors vs Venture Capitalists During a Severe Recession and Otherwise

These are not exactly the same thing. Top angel investors will generally invest in early-stage or startup businesses in exchange for a 20 – 25% return on their investment. These types of investors tend to invest less, and will also want less control, than venture capitalists tend to.

Venture Capitalists

Venture capitalists will also give funds in order to help build new startup companies which the VCs strongly believe have both high-growth and high-risk potential. These might be fast-growth companies with an exit strategy already in place, and they can get up to tens of millions of dollars for investment, networking, and growing their business. Essentially, this is a gamble on possible future profits. Also, venture capitalists will often try to recoup their investment within a 3 – 5 year time frame. They will also, normally, want to acquire a portion of your company if not a controlling stake, so understand that.

People like Jeff Clavier do both, probably depending on the amount of risk and the expected amount of return. More about him in a moment.

The Cons of Working With These Kinds of Investors During a Severe Recession and Otherwise

Another concern with these sorts of investors is that they typically want a percentage or part of the company to lend the money. Sometimes they want a small stake, and other times they want full control and 51% ownership. But in most cases they do want a percentage of the company itself.

When the investor does want a stake in the company, it is important that the terms are acceptable for the business owner as well. The investors’ funds can really help grow a business, but the trade-off of handing over part of the company means the deal has to be worth it for the business owner as well as the angel investor.

Another concern with this type of investors is they will sometimes commit – for a time. But then they don’t follow through and close on the transaction. For this reason it is essential that the business owner not spend any of the funds until the deal is completely done and the funds are in the bank.

Nothing is worse than committing those funds only to discover that the deal falls apart and the angel investor never delivers the funds.

What frustrates you the most about funding your business during a severe recession? Check out how our free guide can help.

Who Are Some Well-Known Angels and Their Investments?

Who is the Most Prolific Angel Investor?

According to Inc. Magazine, the biggest angel investor is Jeff Clavier. He has invested up to $6 million in almost 20 companies. He is the founder of a seed venture capital company in Silicon Valley, Uncork Capital. And he is both an angel and a venture capitalist, and is certainly the best-known of all Silicon Valley angel investors.

What was the Most Profitable Angel Investment of All Time?

Google!

Jeff Bezos gave $125,000 in 1998, investing at 4¢/share. Bezos also got in on Twitter in its second round of funding. This is why, according to Bloomberg, he’s worth over $100 billion.

Angel Investments and Investors in the 2020 Severe Recession: Takeaways

Angels can be a great source of money for your business. They can really save your life during the 2020 severe recession. But make sure you watch out and make the best decisions for you and your business if moving forward with this type of investor.

The post Angel Investors in a Severe Recession appeared first on Credit Suite.

Lima One Recession Funding – Reliable Research So You Know What You’re Getting Into

The COVID-19 pandemic caught the world by surprise. The economy is upside down. If you are a business trying to make it during this time, we can help. The Federal government has approved funding through The CARES Act, including the Paycheck Protection Plan. In addition, many states and local organizations are offering their own COVID-19 relief options. Beyond that, check out what we found out about Lima One Recession Funding. Note: The changing economic environment means nothing stays the same long. This information is accurate as of the time of this writing, but lenders are making changes frequently. Check Lima One Capital for updates.

Our Honest Review of Lima One Recession Funding

When it comes to real estate investments in a recession, there are a few options. You can flip houses, manage rental property, or some combination of both. One thing is for sure however, and that is that you almost always need financing. Lima One recession funding could help.

In recent years a ton of online real estate investment lending institutions have popped up. These differ from the tons of alternative lenders that have broken digital ground. Instead of business loans, they deal only in real estate lending. In addition, though most of the hard stuff is available to deal with online, there are brick and mortar offices.

They are similar to online lenders in many ways. As already mentioned, most of the forms are available online. Both application and approval can often happen with an online form. Also, Lima One recession financing may also allow for a lower credit score than a traditional bank would require for approval.

The main difference is that these companies, including Lima One, deal only in real estate investments. As such, there are certain things that cannot happen online, such as inspections and appraisals. If you are considering real estate investment, or if you are already in the business but looking for a new lender, Lima One recession financing could be the answer to all you seek.

In an effort to help you make an informed decision about Lima One recession financing, we took an in-depth look at their mission, policies, and products. Our research for this should help you decide if it will work for you. Before you can figure that out, especially if you are new to real estate investment, it may be helpful to have a quick reminder of how the process works.

What are Real Estate Investments?

When you get down to the nitty gritty, real estate investment is simply purchasing real estate for the purpose of generating profit. It can happen in a couple of different ways though.

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Flipping Houses

This is the main topic of many television shows. You buy a house for almost nothing, fix it up, and resell it for a profit. It sounds simple enough, and even fun. There is much more to it however. The first roadblock is almost always funding. You have to have the money to buy the house in the first place.

Usually, house flipping financing is short-term, like 13 to 24 months. That isn’t a ton of time to fix it up and get it sold, and you are at the mercy of the contractor’s time table. It is very profitable for a lot of people, but there is a healthy dose of luck involved as well.

The greatest hurdle seen in many house flips is location. You can buy a great house at a great price and fix it up to an even better house that should sell for much more, but if it isn’t located in a place where people want to live, you are going to end up with a house that won’t turn a profit. Worse yet, it may not sell at all.

When looking at a home purchase for a flip, you have to consider location. Not doing so could be extremely detrimental.

Rental Properties

There are a couple of different options here as well, but when most folks think of rentals, they are thinking about buying houses to rent out to others. It can be pretty lucrative if you play your cards right.

Every town needs rental property, but the type of rental property needed may differ vastly. For example, a college town is going to need property that is clean, livable, and able to sleep several roommates to maximize cost effectiveness.

A large city will need a good mix of rental properties for professional young people and young families coming to the area for work. The singles will want something trendy and close to the action, while the families will be looking for size, stability, and something a little lower key. This would be the difference between a downtown loft and a three-bedroom two bath in the suburbs.

In the college town, smaller sized homes and duplexes are going to be vital. If you own a ton of family homes, you may run into issues. If you are in a town that a lot of families are moving to however, those rentals that will hold them could be a gold mine.

Location, Location, Location

Location really is huge.

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Apartments are also a good bet if you want to get into rentals, but you still have to exercise caution. You want a complex that already generates a profit on the front end. Do not ignore the need for upkeep or maintenance either. Both are vital regardless of what type of rental you own, but apartments can be a little more difficult to manage due simply to the number of tenants you have to juggle.

Financing Options for Lima One Recession Funding

Different financing options are available for the various types of real estate investments. Your specific business situation can make a difference as well. Here is what is available as far as Lime One recession funding.

Fix N Flip

This is the house flipping loan available through Lima One Capital. It is a 13-month term loan up to 75% of ARV for 90% of purchase or rehab. There is no prepay penalty, and the minimum credit score necessary for approval is 600. This is pretty low, meaning your credit doesn’t have to be perfect to get started.

While this type of Lima One recession funding can open up a lot of opportunities, remember that there are some major risks involved with flipping houses. It is important to take this and the short loan term into consideration on the front end.

This is why it is important to remember that location is just as important as other factors when house flipping. If you have a great house and your budget is on point, but the house is in a part of town that no one is buying in, you are going to have issues.

Bridge Plus

The Bridge Plus loan is available to those who have 5 or more successful home flips in the past 2 years. It is a lower interest option for Lima One recession funding if you need a quick purchase or refinance for resale. The term is still 13 months, but the funds are more readily available and again, lower interest, due to the previous experience requirements.

Lima One Recession Funding: Construction Loans

If you are planning to do major work or build a structure for residential rental, this is the Lima One recession funding you need. You must already own the investment property or lot, and it is a 70% ARV with a 13-month term.

Cash Out Loan: Lima One Recession Funding at Its Finest

This loan is for those that already own property and want to leverage it. It is 0% down, with a 50% loan to “as-is” value. The term is 13 months.

Rental Financing: Another Form of Lima One Recession Funding

If you are looking at investment property to run as a rental rather than resale, Lima One recession funding has several options.

Rental 30

This option is open to all experience levels for purchase, refinance, or cash out. It is a 30-year term with interest ranging from 5.75% to 8.025%. The minimum amount available is $50,000 and the maximum is $1,000,000. There is no debt to income requirement for the borrower, and the minimum credit score required is 660.

Rental Premium

The Rental Premium product is a loan available with a 30-year term or with a 5/1 or 10/1 loan option. And the property has to have a value of at least $60,000. The minimum credit score for eligibility is 660.

Rental 2-1

This is a loan for rental property with a 2-year term and the option for a 1-year extension. The minimum loan amount is $50,000, and the maximum is $2.5M. The 660 minimum credit score still applies here.

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Multi Family Loan Overview

If you are going to buy multifamily rental property, this loan could be Lima One recession funding you need. A 2-year term with no prepayment penalty highlights the offering. Interest ranges from 8.99% to 10%. The fund amounts are variable between $250,000 to 5,000,000.

With most of these loans you also have the potential to cross-collateralize any property you already own or have under an existing loan with Lima One Capital.

Lima One Capital Recession Funding: What Are People Saying?

We can’t research Lima One recession funding without checking out the company on the Better Business Bureau website. According to the BBB, Lima One has been in business since 2010. They do have 5 complaints on file, but over 8 years that’s not too bad. Most of the complaints relate to issues dealing with individual staff members. They are not related to company policy or habitual ways of doing business. They have an A+ rating.

In addition, they made the top real estate lenders as issued by Fit Small Business in June of 2018.

They offer loans in 40 states.

What Else do You Need to Know about Lima One Recession Funding?

Most real estate loans, regardless of the lender, require 20% down. That can be a stretch during a recession. It can come from multiple sources, including loans from other lenders, leveraging properties you already own, gifts, or personal funds.

Location matters. I have mentioned this already, but you just can’t expect to buy cheap property to flip without thinking about why it is cheap. The same goes for rentals. What kind of renters will you get in the area? Will they pay? Location is an important element that you should pay attention to.

When you have a construction loan, it may cost you to make draws. Sometimes it can cost as much as $200 per construction draw. This is standard, but you need to be sure to add it to your budget, and be careful to manage your construction draws accordingly.

Budgets are important. That will go without saying to many, but just in case you weren’t sure, you need to have a budget and stick to it. It will pay off in the end.

Don’t over improve. You want to increase the value of the property, but stay aware of what your market can handle. Custom cabinets and marble counters are fabulous, but if those buying in that area cannot afford them, you are only going to lose money. Pay attention to the market in a particular location and what it can handle.

Along those lines, consider whether you are selling versus renting. If you are improving a property for rent, you need to pay closer attention to the durability of the materials you use.

Lima One Recession Funding: Conclusion

Finding funding of any kind during a recession is hard. There is no doubt about it. It is important to stay on top of your finances and do your research so that you can find the right sources to fit your needs. It is much easier to slide down a slippery slope. A good funding source could be the traction you need.

Overall, Lima One recession funding is solid. They know their business and generally offer great customer service. The only issue is that there may be, on occasion, a glitch in company-wide communication. However, the company addresses each complaint on the BBB website in a timely manner, and there are not a lot of those complaints. If you are looking at real estate investments, Lima One Capital isn’t a bad place to start.

Armed with this information, you should be able to make a more informed decision about a lender. If you are serious about breaking into real estate investment, or if you are an established investor looking for more funding options during the recession, we would love to help. Find out more here.

The post Lima One Recession Funding – Reliable Research So You Know What You’re Getting Into appeared first on Credit Suite.

Lima One Recession Funding – Reliable Research So You Know What You’re Getting Into

How to Determine the Recession Fundability of Your Business

Recession Fundability: How Your Business Can Get Fundable

So, recession fundability means what? What does it mean when we say a corporation is fundable? This recession fundability analysis ought to get you thinking about your company – and company credit in a whole new light.

Recession Fundability Means What?

So let’s get what recession fundability means out of the way from the very start.

Recession fundability means of or capable of being funded; deserving of being funded, even in a recession.

But what is the fundable meaning in our context?

In the Business Credit Context, Recession Fundability Means What, Exactly?

Here, recession fundability means something a bit different.

So the fundable definition is still ‘capable of getting funding’. It additionally implies – able to be funded by a lending institution or a credit company.

With this fundable meaning, we look more at what credit providers and lenders want to see. But let’s go back for a moment.

Why Fundability Matters

So you’re an entrepreneur. And like each and every single other business owner, since the beginning of time, your company needs money.

There are a few methods for companies to get cash. Without entering into core details, the main ways for companies to get cash are to:

(1) Sell products or services

(2) Sell their assets such as land, vehicles, tools, or office space in buildings they have

(3) Get crowdfunding

(4) Get angel investing or venture capital payments, or

(5) Borrow money.

So for the purposes of our fundable meaning, we are only looking at # 5.

But lenders and credit providers want to see if your business is a good credit risk.

Fraud Runs Rampant

Complicating matters is the problem of scams. Per a 2009 Experian report, “fraud-related costs for U. S. businesses are more than $50 billion annually. This figure may understate the extent of the problem, as estimates show that up to 30 percent of all bad-debt commercial losses are due to ‘soft’ fraud, which primarily occurs from material misrepresentation on an application. Combined with the fact that business fraud is estimated to be three to 10 times more profitable than consumer fraud, business fraud has become a growing concern for organizations.”

As a result of so much fraud, lenders and credit providers examine credit applications exceptionally thoroughly.

Basically, they are looking for any way to tell you no when you come to them for money. Their fundable definition includes the element of fitting their requirements for not being scammers. For financial institutions and the like, company legitimacy makes all the difference in the world. No legitimacy, then no funds. It’s that simple.

Due to their careful checks for fraud, lenders and credit providers consider many different aspects of your application. So they look at many aspects of your corporation, as well. And they are even looking at facets of you, the owner.

Your mission is to alleviate their fears of scams. And you do this by getting rid of every reason they might use, to possibly say no to offering you cash.

A Significant Side Benefit to All This Fundability

There’s another reason that fundability matters. Your leads and customers also want to feel that your company is the real deal. They do not wish to do business with what they view to be a fly by night operation. And could you blame them?

Developing and enhancing fundability to lenders and credit providers will have an added bonus. So that is of giving off a dependability vibe to individuals and corporations intending to buy your goods or services.

Fundability Data Details

Fundability begins with understanding what lenders and credit issuers are seeking. Then we’ll take a look at just how to most effectively accomplish and supply what they want.

Fundability all begins with your industry.

Your Industry Can Affect Recession Fundability

Some industries are believed to be high risk or restricted. These industries, by definition, are most likely to have a more difficult time getting funding of any type.

Industry Selection High Risk or Restricted

Normally, restricted and high risk industries have some things in common. There may be high risks of injury at work. Or the industry might engage in a lot of cash transactions. This is true no matter the safety record of a specific firm, or most of its transaction types.

A Look at Some High Risk Industries

Per the SIC, the following industries are high risk: travel agencies. The NAICS concurs.

A Look at Some Restricted Industries

Per the SIC, the following are restricted industries: pawn shops. The NAICS agrees.

Industry Aligned on All Records

This is the concept of congruency. And it is going to turn up over and over. Business credit reporting bureaus and lenders will analyze your corporation meticulously. Among the main ways they do this is by strictly looking for matching records.

Due to this, if your records do not all match, it will turn up as if they are missing. Missing records will activate a rejection, as a loan provider will assume fraud on its face.

Therefore, it is critical to ensure that every record, everything, is identical.

It goes beyond your industry. It’s also your corporate name, address, phone and fax numbers – everything! These must look the same everywhere. So this includes in IRS records. And in your firm’s records with Dun & Bradstreet, Experian, and Equifax. It also means all licenses required to run your company, and incorporation documents.

Copy/paste this information; do not chance it with retyping.

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Even Your Business Name Can Affect Recession Fundability

You can be innovative when naming your company.

So you want to craft the ideal remarkable name which is easy to spell and say. And you want it to evoke your corporation’s mission statement. But there’s also the matter of risk. Including a risky business type in your corporate name will cause financing rejections.

There is nothing misleading, unlawful, or underhanded by doing this. So it’s okay to keep the name of a high risk or restricted industry out of your business name.

Listed ownership uniform

Congruency counts here, too. Your listed corporate ownership must be the same anywhere you list it.

All corresponding pages list uniform business data

It is best practices to keep a record of every place where your corporation has a listing.

Website

A professional website is a must. A small business needs a professional-looking web site. And it must have site hosting from a provider like GoDaddy. Don’t use Weebly or Wix. It needs to be your domain, not domain.wix.com. Use Upwork to employ people who can help you get set up. Get a professional logo from Fiverr.

Industry aligned

Check out the more successful competitors you have in your industry. What do they include? What do they omit? And what do they highlight?

You do not need to copy another website. And it isn’t in your best interests to do so, anyhow. But do not hesitate to crib from a few of their better ideas. If those concepts work for them, then they may benefit you, too.

Business owners listed

Just like on the documents of the business, you need to display the owners of your business.

Customers and potential customers want to know who they’re dealing with.

And don’t neglect to include your About Us web page on your checklist of locations with corporate information which must be consistent.

Business name and address uniform

Congruency is a requirement here as well.

Special characters

It’s the exclamation point in Yahoo! or the like. Don’t do this, if you can at all help it.

There are going to be people inputting your company name right into internet browser address bars. By including special characters, you’ve just made it harder for them to do that.

Industry in name

Is it better to place the name of your industry into your company name, or not?

If your industry isn’t high risk or restricted, then it may be a good idea. Making things clearer for your prospective customers and customers is often beneficial.

But do not place the name of a high risk or restricted industry in your company name! There is absolutely nothing deceptive or misleading about this.

Available with state

Is your business name offered in your state? Check your name with your Secretary of State — they may require that a business name be unique.

Searchable

Any web site must be searchable.

Because if you make your customers and prospects go to another web site, they might not return.

Your Business Address Can Affect Recession Fundability

A corporate address must be a real brick and mortar building. It must be a deliverable physical address. This can never be a home address or a PO Box. Do not use UPS mailing addresses. Some lenders will not approve and fund unless this criterion is satisfied.

PO Box PBSA

A PO Box PBSA stands for a PO Box Post Box Street Address. Lenders and credit providers know that these are really post office boxes. They will see these as being non-legitimate ‘addresses’, just like post office boxes.

Physical or virtual office (CMRA)

Many business owners, particularly startup owners, do not have the money for actual office space. But loan providers check USPS and places like Google Maps to see if you’re using a home address. If you are, you often get an immediate decline. Never use a home address on your application. Even if your firm is just you.

Luckily, the good news is, virtual offices are available in all states and many cities.

A virtual address is a great solution. We recommend Alliance Virtual Offices, Regus, and DaVinci.

Same state business is incorporated

Your virtual office, preferably, must be in the same state where your company is incorporated.

Mailing address vs. physical address

In the very same vein as the caution against a PBSA, you need an actual physical address versus a mailing address.

Even Your Business Phone Number Can Impact Recession Fundability

Your corporation must have its very own telephone number. Do not give a personal cell or residential phone as a company phone number. But VOIP (voice over internet protocol) is fine.

Likewise, your business phone number must be toll-free. This is 800 exchange or such.

Uniform number

Again, congruency is an absolute requirement. This includes using the area code anywhere the number is listed.

Mobile, Home, and Business numbers

A cell number or home telephone number as your primary business line may get you flagged as un-established. Your corporate number must only be used for your corporation. It must not be an added line for your family to use.

Recession fundability means the company’s phone is just for the business and no one else.

Voicemail content

Your voicemail greeting should, at an outright minimum, inform the client who they have reached and when you can return their telephone call.

Business 411 Listing

You must list your company telephone number on 411. You can do so on ListYourself.net.

Your phone number needs to have a 411 listing for most credit issuers, lenders, vendors, and even insurance providers to approve you. Check your record to see if you’re listed. Ascertain your information is accurate.

Business name and telephone number uniform

As always, congruency is crucial here.

Time in Business

The amount of time you have been in business is, of course, a sign of reliability and for that reason fundability to lenders and credit providers.

Incorporation date

But what is the day when a corporation starts? It’s the day of incorporation. This is one reason why, the quicker you incorporate, the better.

Business license issue date

Does your business have every one of its necessary licenses to operate in your industry and area? When did you get your licenses? A lender or credit provider won’t consider your company to genuinely be in business if you’re missing essential licenses. The faster you get licensing, the better.

With no license to work in your industry, your ability to attain fundability is cut off at the knees. The lender or credit provider will feel it’s more important to safeguard the public than to give you funding.

A Business Bank Account is Vital for Recession Fundability

A vital piece of the fundability puzzle is having a separate business bank account. You need a business bank account, to keep funds separate from your personal accounts. Commingling personal and company funds and expenses is a recipe for an audit from the IRS. The simplest way to keep these two universes distinct is to have separate bank accounts.

Bank account open date

The day you open your business bank account is an important one in the life of your corporation. The account opening date is the business’s opening date, far as lenders are concerned. A longer history is better.

It’s also the business’s opening date, so far as the business CRAs see it. This is because the business CRAs have seen some firms try to do an end-run around time in business requirements by buying shelf corporations.

A shelf corporation is a corporation with value only in its age and nothing else. CRAs see the practice of buying them as deceptive. As a result, business owners can wind up spending hundreds if not thousands of dollars for a shelf corporation, only to see their cash wasted when the age of the shelf corporation isn’t taken into consideration by the CRAs at all.

Actual business account (not personal)

There are some similarities between personal and business bank accounts. But to open a business bank account, the business owner must submit added documentation. This includes business registration paperwork. It can often (though not always) include proof of having an EIN.

A business bank account lists both the owner and the business. Such accounts may require a certain minimum balance to avoid maintenance fees. Fees in general tend to be higher than those for personal business bank accounts.

Business name, address, and ownership uniform

Congruency is a requirement here, as it is in all other areas.

Checking account history

Financial institutions keep credit ratings which help them determine whether to lend your company cash. Essentially, these are unbiased measures of fundability, per the lender. In part, these scores are based upon the historic actions of you with reference to your business bank account.

A rating of Low-5 is usually believed to be the minimal rating for getting funding.

Possibly the simplest way to accomplish and maintain a terrific bank credit score is to deposit a minimum of $10,000 into your business bank account and keep it there for as long as three months. On top of that, make consistent deposits.

These activities will help in three ways. One, you will have maintained a superb minimum balance for a minimum of three months. Two, you will probably not overdraw with such an outstanding balance. And three, you will be at the magic minimum for a Low-5 bank credit score.

NSFs and Negative Balances

Writing checks with insufficient funds (NSFs), or going into the red are certain ways to ruin your bank rating.

By keeping a minimum balance of $10,000 on a consistent basis, you will, generally, make NSFs and negative balances a distant memory.

Your Business Entity Can Affect Recession Fundability

A business entity defines issues of liability. And it makes a difference when it comes to taxes.

The best business entity for fundability is a corporation.

Corporations are legally distinct from their owners. This is the case even when a business has just one employee or only one owner. Or they are the same person. Whether you choose a C-corporation, an S-corporation, or an LLC is your choice. Speak to an attorney or an experienced tax expert to find out which is the best possible choice for you.

Sole proprietorship

A sole proprietorship means the business owner is it when it pertains to liability and tax obligations. Nobody else is responsible.

DBA

Any complete business name must include any documented DBA filing you use. This is a necessity for records congruency.

But no matter what, if you run a small business as a sole proprietor, the best thing to do is to incorporate. If you have already filed a DBA, you will still have to move onto a corporate business entity. You should only look at a DBA as an interim step on the way to incorporation.

Good standing

Check with your Secretary of State to ensure they have all the needed information for your corporation. See to it that you are in good standing with them. And make sure that your entity is active. You must file annual reports and pay a yearly fee to stay active.

Foreign filing

A foreign LLC is a limited liability corporation formed in one state but registered in another state. It isn’t an LLC formed outside of the USA. A distinct registration is needed because the laws between the states vary.

If your corporation operates outside of your state, it will reinforce fundability to foreign file.

Registered agent

A corporation will also need to choose a registered agent that they show on the Articles of Incorporation. A registered agent receives service of process and legal and tax papers on behalf of the corporation.

Business name, address, owners, and listed ownership uniform

Congruency is necessary here, as in all other areas. This includes if you were in business prior to incorporating, as commonly states will require a business to use a term like ‘incorporated’ or ‘LLC’ in its name.

Date acquired

If you purchased your company from another person, when was that? It will count toward time in business. The longer, the more fundable your business is.

EIN #

Visit the IRS site and get a free EIN for your company. This is also where you pick a business entity like corporation, LLC, and so on.

To open a business bank account, you need an EIN, so get this out of the way first. The IRS has a form for everything, including getting an EIN, the Federal tax ID number. This is form SS-4. When you have filled it out, either mail or fax it to the appropriate office. The form has this info.

EIN issue date

You must get your EIN ASAP, so you have it for filing tax returns and making bank deposits. Per the IRS, if you do not have an EIN by the time your business tax return is due, write ‘Applied For’ and the application date in the space where you’re supposed to add the EIN. Do not put your Social Security Number there. See:

Being behind in filing your taxes will not do your business any favors regarding fundability.

Business name, address, owners, industry, contact information, and listed ownership uniform

Congruency is a necessity on your EIN application, as in all other areas.

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Your Email Can Even Affect Recession Fundability

Corporate e-mail addresses must be professional. This means something like admin@yoursite or info@yoursite.

Company domain

Your corporate e-mail must be on the exact same domain as your company. Do not use generic free e-mail services likes Gmail, Yahoo, or MSN.

Uniform on all records

As everywhere else, congruency is a necessity for email records.

Business Licenses

A business must have all of the licenses necessary for running.

These licenses all must be in the perfect, precise name of the business. And they must have the very same business address and phone numbers.

This means not just state licenses. But it can possibly also mean city licenses. Check with your Secretary of State’s office. Here, recession fundability means being responsible.

Business name and listed owners uniform

Congruency is a requirement on your company licenses, as in all other areas.

License obtained when required (not always required)

Your state and industry may have their own licensing requirements, if any. The best place to find the specifics is with the Secretary of State’s office for the state where your company is incorporated. If you do business in more than one state, then check their Secretary of State offices as well.

Business Credit Reports

Fundability often depends upon business credit.

Bureaus

The most significant and best-known business credit reporting agencies (also called CRAs or bureaus) are D&B, Experian, and Equifax.

D&B report

This is the only bureau for credit monitoring strictly focused on business credit. It checks your corporation’s interactions with suppliers and vendors. Many potential suppliers check the Dun & Bradstreet report on your corporation before offering credit terms. This means it is important for you to keep the D&B report of your company updated and accurate.

Experian report

Like Dun & Bradstreet and Equifax, Experian also gathers info available in various public records together with details from collection agencies, credit card companies and various other data sources.

Equifax report

This bureau likewise collects all trade credit information and information from various public records to review your corporation’s creditworthiness. However, their report depends heavily on how your corporation interacts with various banks as well as different traditional lenders like credit card providers.

Business Data Agencies

These businesses gather data and supply it to the business CRAs.

CreditSafe

CreditSafe provides corporate and consumer reports. They also provide monitoring, collection services, and financial statements.

CreditSafe also provides alternative credit, where they base some of their scoring on utility and rent payments. These payments are usually not taken into consideration by other CRAs unless they’re late. CreditSafe reports these payments whether positive or negative.

Utility payments on your CreditSafe report can include power, cable, internet, and phone. You can include other third-party payments like Credit Suite, CRM, and software.

LexisNexis Report

LexisNexis is a source where a number of the lenders denying loan applications get their information from. They offer information regarding likelihood to pay, or not.

Lenders compare LexisNexis info to what you put on your financing application. If the application and LexisNexis don’t match, then loan providers will deny you a loan. They will see the incongruity as fraud.

SBFE

The SBFE collects information on small businesses from its members, which are loan providers. Lenders use this info to make credit decisions.

FICO SBSS

FICO uses its SBSS (Small Business Scoring Service) Score to integrate consumer bureau, monetary, application, and business bureau data. FICO then validates their SBSS versions for deals like Credit line transactions, and term loans. And it looks at commercial card obligations up to $1 million. The idea is to review just how your small business pays off all kinds of loans.

Business credit providers and the SBA use the FICO SBSS score as a tool to choose whether they should authorize a loan to your company.

Identification Numbers

The CRAs use identification numbers to designate your company.

BIN # (Business Identification Number)

Experian’s BizSource assigns a BIN.

D-U-N-S #

Start at the D&B website and get a free D-U-N-S number. If there is no D-U-N-S number, then there is no record and no PAYDEX score. Your D-U-N-S plus three payment experiences gets you a PAYDEX score.

Business Credit History

Your company credit history is the single most important driver of your business credit scores. Here, fundability means paying your business’s bills on time.

Late repayments will impact your business credit score for years. If you pay your business financial obligations off, as fast as possible and as fully as possible, you can make a very real difference in your credit scores. No other aspect of business management more directly influences your company credit scores.

Make sure to pay on schedule and you will directly and favorably impact fundability.

UCC Filings

If the business owner has poor consumer credit, lenders will often take out a UCC blanket lien if they give your corporation funding.

A UCC blanket lien is a note which goes on your credit report. It says that the lender has an interest in all your corporation’s assets until you pay off the loan in full. Thus, there may be dire consequences if you default.

These UCC filings are a matter of public record. Lenders and credit providers take them into consideration when deciding if your corporation is fundable.

Judgments, Liens, and Bankruptcies

These are all a matter of public record. And they can all negatively impact recession fundability.

Together with UCC blanket liens are any other kinds of liens as against your business assets. A lien is a credit provider’s right to retain possession of property belonging to until the financial obligation owned by that individual or company is discharged.

A lien isn’t quite the same as collateral — it’s the property which is subject to the lien is the collateral.

Total number of trade accounts and highest credit limit

These come from credit issuers which give you starter credit when you have none. Terms are generally Net 30, rather than revolving.

The more trade accounts, the better. In general, at least five to eight are necessary before moving onto credit cards which are harder to get. But pay attention to your highest credit limit.

Your highest credit limit is an important figure for credit issuers and lenders. For example, unsecured financing can result in a loan of 5 — 8 times the amount of your highest revolving credit limit account. So, by definition, the higher your highest credit limit, the more you can get from this form of financing.

In addition, some credit issuers want to see a particular high credit limit before they issue credit to your business. In general, a few high credit limit accounts do more to enhance business fundability than a large number of very low credit limit accounts.

Age of trade accounts

How long have your trade accounts been open? This should correlate more or less directly with your time in business. By getting trade credit ASAP, your trade accounts are as aged as they can be.

Don’t buy business tradelines, to artificially inflate the age of your trade account. The FBI has found that the trade line company can be a fake and the primary card holder can be a stolen identity in these kinds of scams. Business CRAs are well aware of these scams. If you or your business are caught, you will be blacklisted by CRAs like D&B and your fundability will likely never recover.

Financial data

Lenders and credit providers want to see your business’s financial data. Without this information, they will wonder if they can trust your statements about your business’s financial solvency. Increase fundability by providing this information when requested.

Open accounts

Opening and responsibly using corporate credit accounts can help you raise your available credit and enhance your credit rating. The trick is to use your credit. Just opening a number of accounts and never using them is not going to do anywhere near as much to improve fundability.

Closed accounts

Closing accounts has a direct impact on overall credit history. If a card is closed and is in good standing, it will fall off a credit report at some point. And as soon as it’s gone, the history which accompanied it is gone, too. A card in good standing can be closed by the card owner or by the credit provider if the card owner hasn’t been using the credit. This is different from a card closed in poor standing, where that info stays on your credit report for longer.

By closing accounts, you are tanking the average age of your accounts. It’s a part of fundability over which you have control — just use your credit and pay it back quickly. This way, your providers won’t feel the need to close accounts for non-use.

Business Information

The most essential issue with your corporate information is to be absolutely sure it is consistent from document to document.

Business name and address, listed ownership, and contact information uniform

Congruency is a requirement in your corporate CRA records, as in all other areas.

Financial Statements

Many credit providers and lenders not surprisingly wish to see your business’s financial statements.

Business Financials

Business financials include if your business is making a profit. And they include if your financial forecasts for the coming quarters.

Business tax returns

Some alternative loan providers currently offer credit lines for $50 — 150,000. They will frequently only want tax returns versus all income documentation. For over $100,000, you must supply a P&L and a balance sheet.

The approval amount is typically 10% of annual sales per company tax returns.

Business financial statements (company/accountant prepared or audited)

Standard company financial statements include your income statement, a statement of retained earnings (AKA the statement of owners’ equity), company balance sheet, and a statement of cash flows.

It will considerably and positively impact your fundability if you have them prepared or at least audited by an accountant or an accounting company.

# of years tax returns filed

For how long has your company been operating? And how many years has it been filing tax returns? Those numbers must be the same, even for years your business loses cash.

Reported income and expenses

What is your corporation’s reported income? Do your reported expenses surpass your reported income? Are they proportionate with those expected from a business of your size, age, and industry?

Taxes up to date

Are your business’s taxes up to date? If payments to the IRS are slow as well as late, it sends a message. And lenders and credit issuers will believe your payments to them will follow the exact same pattern.

Personal Financials

Particularly for newer companies, credit issuers and lenders will wish to see your personal financials.

Personal financial statements

Can your personal financials be located? Do they show responsible financial stewardship?

Personal tax returns and how many tax returns can be offered

Are your personal tax returns in order? Can you locate tax returns and supply them if requested? Do you file on time? If you have to pay, do you pay on time? If the answer to any one of these questions is no, then fundability is damaged.

Reported income and expenses

Do they match the earnings and expenses expected from the owner of a company of your size, age, and industry?

Debt to income

This ratio is all of your monthly debt payments, divided by gross monthly income. This number is how lenders and credit providers measure your ability to pay back whatever you borrow.

Child support and Criminal record

So both affect fundability. Are you up to date on child support payments if you do not live with a minor child? Do you have a criminal record?

Bureaus

Just like there are business credit reporting agencies, there are CRAs for personal credit.

Experian and Equifax

So in addition to reporting on business credit, Experian and Equifax also report on personal credit.

TransUnion

TransUnion only reports on personal credit. A TransUnion credit report can include your personal mortgage account, even if you completely paid your mortgage off. Your TransUnion report will also show any public records about you, such as judgments against you.

Data Agencies

There are companies which collect data and provide it to the personal credit reporting agencies.

ChexSystems

Some banks and other credit issuers use ChexSystems to get more information on your personal credit habits. They also report on insufficient funds, closed accounts, and overdrafts.

LexisNexis

Lenders use LexisNexis information to cross-check loan applications. So they want to see if loan criteria are being met. They want to determine if what you claim on your application jibes with the records. And they want to know if it’s likely your business will fail.

FICO

Your FICO score comes from your payment history, amounts of owed, length of credit history, credit mix, and new credit. Together, the first three elements comprise over 3/4 of your FICO score. Responsible financial management, over time, will boost fundability the most effectively.

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Personal Credit History Can Affect Recession Fundability

Much like your business credit history matters for what fundability means, so does personal credit history.

Accounts over limit

If the number of accounts over limit is more than zero, it can tank your fundability.

Authorized users

Are the authorized users on your accounts strangers you’re getting to pay you to piggyback on your credit? This is just barely this side of legal and often a prelude to fraud. Most credit issuers and lenders will see it as proof of intent to commit bank fraud.

Short sales

In a short sale, you try to sell your home for less than you owe. But this can only happen if the lender agrees. If the house sells, lender keeps the proceeds. Not all lenders agree to a short sale. Often, homeowners must be 90 or more days late for a lender to so much as consider the idea.

Some lenders may not forgive the unpaid balance on the mortgage. Some state laws let lenders seek deficiency judgments. So those force you to repay the difference between the sale price and the balance due on the mortgage.

Lenders report a short sale to TransUnion, Experian, and Equifax as a charge off, settlement, or deed-in-lieu of foreclosure. Or they can be a loan settled for less than the amount due. How a lender reports the short sale can significantly impact the damage to your credit score.

Any late mortgage payments made before sale will further undermine your score. If lender gets a deficiency judgment to collect the mortgage balance, that also will damage your score. And so will the amount of the deficiency.

So a short sale will drop a personal credit score by up to 100-150 points. The higher your credit score to start, the more it will plummet.

Short sales can remain on your credit report for as long as seven years. But it isn’t as bad as a foreclosure or a bankruptcy.

Settled debt

Settled debt is a plus for fundability.

Foreclosures and late payments

So just like a bankruptcy, foreclosures hurt your fundability. And the larger and later your late payments are, the worst it is. And the more of them there are, the more they harm fundability.

Opened accounts

With fewer than five, your file may be seen as “thin” and it will negatively impact your fundability.

Financing facilities reported and history length

In general, major retailers and banks on a report correlate with a longer and more favorable personal credit history. But a shorter credit history is generally not seen as favorably as a longer one.

Inquiries

More than two recent inquiries will be seen as proof of credit shopping.

Utilization per credit card/line

Credit Utilization Rate is credit in use, divided by total available credit. Keep this ratio at about 30% or less. Experian checks utilization rate both overall and per credit card.

Bankruptcy

This is a court proceeding where a judge and a court trustee check your assets and liabilities. Personal bankruptcy tends to be conflated with a lack of personal financial responsibility.

So will an explanation to a credit provider or lender help with fundability? It’s worth the effort.

Even the Application Process Has to Do With Recession Fundability

So even the process of applying can have an impact on your fundability.

Application Submission

So how are you submitting your application? What does your lender or credit provider prefer?

Timing Can Impact Recession Fundability

Your most recent three months’ worth of bank account management loom large. This is due to a number which banks keep but don’t publicize, the bank rating.

A bank rating measures the average minimum balance as kept in a business bank account over a three-month period. Therefore a $10,000 balance ranks as a Low-5, a $5,000 balance rates as a Mid-4, etc.

A small business’s chief goal should always be to keep a minimum Low-5 bank score for at least three months. So this means an average $10,000 balance. Without a minimum of a Low-5 score, most banks assume one thing about the business. It’s that the business has little to no ability to pay back loans or business lines of credit.

Lender negotiations and online, paper or in personal application

In particular, an application presented in person allows for a dialogue and negotiations. This is seen as the most serious and generally the most fundable.

Lending product selected

Are you trying for a very large loan the first time around? So you probably won’t get it. By proving your financial responsibility, lenders will be more likely to loan to you. And they will want to loan you more.

Lender

Many lending institutions prefer working with certain industries. If the bank is more comfortable with your industry, then it will help your fundability cause.

Business ownership, name, and address verifiable

Ownership documents will prove your business ownership, name, and address and bolster your fundability.

Recession Fundability Means What, on Balance?

Keep all records consistent to ensure fundability. Set up your business legitimately, with a domain, phone numbers, an address, and more. So get all ID numbers and register with the IRS. And set up your business bank account for fundability. Keep all business financials organized. And have them prepared by a competent professional. Get your personal credit ‘house’ in order.

Recession fundability means your business can get financing from a credit provider or lender.

The post How to Determine the Recession Fundability of Your Business appeared first on Credit Suite.

Being Fundable in a Recession

Do you know about being fundable in a recession? Fundability – or, not just the ability to be funded but how desirable an entity is for funding – means different things to banks, venture capitalists, angel investors, and informal investors. However, they all agree on a few basic principles when answering the question of: is your business fundable in a recession?

Is Your Business Fundable in a Recession? The True Meaning of Fundability, and Just How Your Business Can Get Fundable

So, what does it mean when we speak about fundability? What does it mean when we say a company is fundable? This fundable analysis ought to get you thinking of your corporation – and corporate credit in a whole new light.

But first, let’s talk recessions.

Recession Era Financing

The number of United States financial institutions and thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the marketplace along with deregulation in the 1990s, lowering barriers to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets concentrated in ever‐larger financial institutions is problematic for local business owners. Big banks are much less likely to make small loans. Economic recessions imply financial institutions end up being extra cautious with financing. Thankfully, fundability does not depend on financial institutions alone.

Is Your Business Fundable in a Recession? What Does it Mean?

Let’s get that fundable meaning out of the way from the very start.

Fundable: of or capable of being funded; deserving of being funded.

Yet what is the fundable meaning in our context?

Is Your Business Fundable in a Recession? The Business Credit Context

Here, the meaning is just a little bit different.

While it’s still capable of being funded, it also indicates – able to be funded by a loan provider or a credit company.

With this fundable definition, we are looking more at what credit issuers and loan providers wish to see. But let’s go back for a moment.

Is Your Business Fundable in a Recession? Why Does It Matter?

You’re a business owner. And like every single other entrepreneur, since the beginning of time, your company needs cash.

There are a few means for companies to get cash. Without entering into the nitty gritty information, the main ways for companies to get money are to:

(1) Sell products or services

(2) Sell their assets such as land, vehicles, tools, or office space in buildings they have

(3) Acquire crowdfunding

(4) Get angel investing or venture capital payments, or

(5) Borrow cash.

For the purposes of our fundable investigation, we are just looking at # 5.

Loan providers and credit providers want to see if your company is a good credit risk. To firms which are fronting your corporation cash, they want to know that you can pay them back.

Fraud Runs Rampant

As a result of so much fraud, lenders and credit providers inspect credit applications very thoroughly.

Essentially, they are trying to find all kinds of ways to tell you and your firm no when you come to them for cash. Their fundable meaning includes the component of fitting their requirements for not being scammers. For financial institutions and the like, business legitimacy makes all the difference in the world. No legitimacy, then no funds. It’s that simple.

As a result of their careful checks for fraud, lenders and credit providers are taking into consideration numerous different aspects of your credit or loan application. They are looking at many aspects of your company, as well, and even at facets of you, the owner’s existence.

Your mission is to ease their fears of frauds. And the way in which you do this is by eliminating every factor they can point to, to potentially say no to offering you money.

A Substantial Side Benefit to All This Fundability

There’s another reason fundability matters. Your leads and customers likewise want to feel that your corporation is the real deal. They don’t want to do business with what they view to be a fly by night operation. And could you blame them?

Developing and improving fundability to lenders and credit providers will have the added reward of giving off a reliability vibe to individuals and corporations aiming to buy your goods or services.

Is Your Business Fundable in a Recession? Data Details

Fundability starts with recognizing what lenders and credit issuers are looking for. Then we’ll have a look at exactly how to most effectively accomplish and supply what they want.

Fundability all begins with your industry.

Your Industry Can Make or Break If Your Business is Fundable in a Recession

Some industries are thought to be high risk or restricted. These industries, by definition, are most likely to have a harder time getting funding of any type. How fundable is your business should start with – how fundable is your industry?

Industry Selection High Risk or Restricted

Usually, restricted and high risk industries have some things in common. There may be high risks of injury at work. Or the industry might engage in a great deal of cash transactions. This is true regardless of the safety record of a particular firm, or the majority of its transaction types.

Consider Some High Risk Industries

Per the SIC, the following industries are high risk: travel agencies. The NAICS concurs.

A Look at Some Restricted Industries

Per the SIC, the following are restricted industries: pawn shops. The NAICS agrees.

Industry Aligned on All Records

This is the idea of congruency, and it is going to show up again and again. Business credit reporting bureaus and lenders will examine your firm diligently. Among the major ways they do this is by strictly checking for matching records.

Due to this, if your records do not all match, it will show up as if they are missing. Missing records will trigger a rejection, as a loan provider will assume fraud on its face.

As a result, it is crucial to make sure that every record, everything, is identical.

It goes beyond your industry. It’s also your corporate name, address, phone and fax numbers –everything! These must look the same all over, such as in IRS records; your company’s records with Dun & Bradstreet, Experian, and Equifax; all licenses needed to run your corporation; and incorporation documents.

Copy/paste this information; do not chance it with retyping.

Business Name

You can be innovative when naming your business.

Beyond crafting the perfect unforgettable name which is easy to spell and say, and also evokes your corporation’s mission statement, there’s also the matter of risk. Including a risky business type in your company name will trigger funding denials.

There is nothing misleading, illegal, or underhanded in keeping the name of a high risk or restricted industry out of your business name.

Listed ownership uniform

Congruency counts here, too. Your listed company ownership must be the same anywhere you provide it.

All corresponding pages list uniform business data

It is best practices to maintain a record of every place where your business has a listing.

A Professional Website Can Make a Difference When it Comes to Being Fundable in a Recession

A professional web site is a must. A business needs a professional-looking internet site. And it must have website hosting from a provider like GoDaddy. Don’t use Weebly or Wix. It needs to be your domain, not domain.wix.com. Use Upwork to employ people who can help you get set up. Get a professional logo from Fiverr.

Industry aligned

Consider the more successful competition you have in your market. What do they include? What do they leave out? And what do they highlight?

You do not need to copy another website, and it isn’t in your best interests to do so, anyway. But do not hesitate to crib from some of their better ideas. If those concepts benefit them, then they might help you, as well.

Business owners listed

Just like on the documents of the business, you need to display the owners of your business.

Customers and potential customers want to know who they’re dealing with.

And do not forget to include your About Us web page on your checklist of locations with company details which must be consistent.

Business name and address uniform

Congruency is a requirement here too.

Special characters

It’s the exclamation point in Yahoo! or the like. Don’t do this, if you can at all help it.

There are going to be people inputting your business name right into internet browser address bars. By adding special characters, you’ve just made it harder for them to do that.

Industry in name

Is it better to place the name of your industry into your company name, or not?

If your industry isn’t high risk or restricted, then it may be a good idea. Making things clearer for your potential customers and clients is usually beneficial.

But don’t place the name of a high risk or restricted industry in your business name! There is absolutely nothing deceptive or misleading about this.

Available with state

Is your corporate name available in your state? Check your name with your Secretary of State. They could require that a business name be unique.

Searchable

Any web site must be searchable.

Because if you make your customers and prospects go to another web site, they may not return.

A Business Address Can Help Decide If a Business is Fundable in a Recession

A corporate address must be an actual brick and mortar building. It must be a deliverable physical address. This can never be a home address or a PO Box. Do not use UPS mailing addresses. Some lenders will not approve and fund unless this criterion is met.

PO Box PBSA

A PO Box PBSA stands for a PO Box Post Box Street Address. Lenders and credit providers understand that these are really post office boxes. They will see these as being non-legitimate ‘addresses’, just like post office boxes.

Physical or virtual office (CMRA)

Many entrepreneurs, particularly startup owners, don’t have the cash for actual office space. But loan providers check USPS and places like Google Maps to see if you’re using a home address. If you are, you often get an immediate decline. Never use a home address on your application. Even if your business is only you.

Luckily, the good news is, virtual offices are available in all states and many cities.

A virtual address is a fantastic solution. We recommend Alliance Virtual Offices, Regus, and DaVinci.

Same state business is incorporated

Your virtual office, preferably, must be in the same state where your company is incorporated.

Mailing address vs. physical address

In the exact same vein as the caution against a PBSA, you need a real physical address versus a mailing address.

A Business Phone Number Helps Determine If a Business is Fundable in a Recession

Your corporation must have its own phone number. Do not give a personal cell or residential phone as a business telephone number. But VOIP (voice over internet protocol) is fine.

Also, your company telephone number must be toll-free. This is 800 exchange or such.

Uniform number

Again, congruency is an absolute requirement. This includes using the area code anywhere the number is provided.

Mobile, Home, and Business numbers

A cell number or home telephone number as your primary business line could get you flagged as un-established. Your company number must only be used for your corporation. It must not be an additional line for your family to use.

Voicemail content

Your voicemail greeting should, at an absolute minimum, inform the customer who they have reached and when you can return their phone call.

Business 411 Listing

You must list your corporate telephone number on 411. You can do so on ListYourself.net.

Your phone number needs to have a 411 listing for most credit issuers, lenders, vendors, and even insurance companies to approve you. Check your record to see if you’re listed. Make sure your info is accurate.

Business name and phone number uniform

As always, congruency is crucial here.

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Time in Business Can Help Make a Company Fundable in a Recession

The amount of time you have been in business is, of course, an indicator of reliability and as a result fundability to lenders and credit issuers.

Incorporation date

But what is the day when a corporation starts? It’s the day of incorporation. This is one reason why, the quicker you incorporate, the better.

Business license issue date

Does your company have every one of its necessary licenses to operate in your industry and area? When did you get your licenses? A lender or credit provider will not consider your business to genuinely be in business if you’re missing critical licenses. The faster you get licensing, the better.

With no license to work in your industry, your ability to attain fundability is cut off at the knees. The lender or credit provider will feel it’s more important to protect the public than to offer you money.

A Business Bank Account Helps Decide If a Business is Fundable in a Recession

An essential piece of the fundability puzzle is having a separate business bank account. You need a business bank account, to keep funds separate from your personal accounts. Commingling personal and company funds and expenses is a recipe for an audit from the IRS. The simplest way to keep these two universes distinct is to have separate bank accounts.

Bank account open date

The date you open your business bank account is a crucial one in the life of your corporation. The account opening date is the business’s opening date, far as lenders are concerned. A longer history is better.

It’s also the business’s opening day, so far as the business CRAs see it. This is because the business CRAs have seen some firms attempt to do an end-run around time in business requirements by buying shelf corporations.

A shelf corporation is a corporation with value just in its age and nothing else. CRAs see the practice of buying them as deceptive. As a result, entrepreneurs can end up spending hundreds if not thousands of dollars for a shelf corporation, only to see their money squandered when the age of the shelf corporation isn’t considered by the CRAs at all.

Actual business account (not personal)

Business name, address, and ownership uniform

Congruency is a requirement here, as it is in all other areas.

Checking account history

Financial institutions keep credit scores which help them find out whether to loan your company money. Essentially, these are objective measures of fundability, per the lender. In part, these ratings are based upon the historical actions of you with reference to your company bank account.

A score of Low-5 is usually believed to be the minimum rating for getting financing.

Potentially the easiest way to accomplish and maintain a fantastic bank credit score is to deposit a minimum of $10,000 into your business bank account and maintain it there for as long as three months. In addition to that, make consistent deposits.

These actions will help in three ways. One, you will have kept a superb minimum balance for a minimum of three months. Two, you will most likely not overdraw with such an outstanding balance. And three, you will be at the magic minimum for a Low-5 bank credit rating.

NSFs and Negative Balances

Writing checks with insufficient funds (NSFs), or going into the red are surefire ways to spoil your bank rating.

By maintaining a minimum balance of $10,000 on a consistent basis, you will, generally, make NSFs and negative balances a distant memory.

Business Entity

A business entity defines issues of liability, and it makes a difference when it comes to taxes.

The best business entity for fundability is a corporation.

Corporations are legally distinct from their owners. This holds true even when a business has just one employee or only one owner. Or they are the same person. Whether you pick a C-corporation, an S-corporation, or an LLC is your choice. Speak with a lawyer or an experienced tax specialist to determine which is the best possible choice for you.

Sole proprietorship

A sole proprietorship means the business owner is it when it pertains to liability and tax obligations. No one else is responsible.

DBA

Any full company name must include any recorded DBA filing you use. This is a requirement for records congruency.

But no matter what, if you run a small business as a sole proprietor, the best thing to do is to incorporate. If you have already filed a DBA, you will still have to move onto a corporate business entity. You ought to only consider a DBA as an interim step on the way to incorporation.

Good standing

Check with your Secretary of State to ensure they have all the required info for your company. See to it that you are in good standing with them, and that your entity is active. You must file annual reports and pay a fee every year to remain active.

Foreign filing

A foreign LLC is a limited liability corporation formed in one state but registered in another state. It isn’t an LLC formed outside of the USA. A distinct registration is required because the laws between the states vary.

If your business operates outside of your state, it will strengthen fundability to foreign file.

Registered agent

A corporation will also need to pick a registered agent that they show on the Articles of Incorporation. A registered agent receives service of process and legal and tax papers on behalf of the corporation.

Business name, address, owners, and listed ownership uniform

Congruency is necessary here, as in all other areas. This includes if you were in business prior to incorporating, as generally states will require a firm to use a term like ‘incorporated’ or ‘LLC’ in its name.

Date acquired

If you purchased your company from another person, when was that? It will count towards time in business. The longer, the more fundable your company is.

EIN #

Visit the IRS website and get a free EIN for your business. This is also where you pick a business entity like corporation, LLC, and so on

EIN issue date

You must get your EIN ASAP, so you have it for filing tax returns and making bank deposits. Per the IRS, if you do not have an EIN by the time your corporate tax return is due, write ‘Applied For’ and the application date in the space where you’re supposed to add the EIN. Do not put your Social Security Number there.

Being behind in filing your taxes will not do your company any favors regarding fundability.

Business name, address, owners, industry, contact information, and listed ownership uniform

Congruency is a requirement on your EIN application, as in all other areas.

Email

Corporate e-mail addresses must be professional. This means something like admin@yoursite or info@yoursite.

Company domain

Your corporate e-mail must be on the exact same domain as your company. Do not use generic free e-mail services likes Gmail, yahoo, or msn.

Uniform on all records

As anywhere else, congruency is a necessity for email records.

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Business Licenses

A corporation must have all of the licenses essential for running.

These licenses all must be in the perfect, accurate name of the business. And they must have the same corporate address and telephone numbers.

This means not just state licenses, but potentially also city licenses. Check with your Secretary of State’s office.

Business name and listed owners uniform

Congruency is a requirement on your business licenses, as in all other areas.

License obtained when required (not always required)

Your state and industry can have their own licensing requirements, if any. The best place to find the specifics is with the Secretary of State’s office for the state where your business is incorporated. If you do business in more than one state, then check their Secretary of State offices as well.

Business Credit Reports

Fundability commonly depends on corporate credit.

Bureaus

The most significant and best-known business credit reporting agencies (also called CRAs or bureaus) are D&B, Experian, and Equifax.

D&B report

This is the only bureau for credit monitoring strictly concentrated on company credit. It looks into your company’s interactions with suppliers and vendors. Many potential suppliers check the Dun & Bradstreet report on your company prior to offering credit terms. This means it is critical for you to keep the D&B report of your company updated and accurate.

Experian report

Like Dun & Bradstreet and Equifax, Experian also gathers details available in various public records together with info from collection agencies, credit card companies and various other data sources.

Equifax report

This bureau likewise gathers all trade credit information and information from various public records to examine your company’s creditworthiness. However, their report depends heavily on how your corporation interacts with various banks as well as different traditional lenders like credit card providers.

Business Data Agencies

These businesses collect data and supply it to the business CRAs.

CreditSafe Helps Determine If Your Business is Fundable in a Recession

CreditSafe offers business and consumer reports. They also offer monitoring, collection services, and financial statements.

CreditSafe also provides alternative credit, where they base some of their scoring on utility and rent payments. These payments are typically not considered by other CRAs unless they’re late. CreditSafe reports these payments whether positive or negative.

Utility payments on your CreditSafe report can include power, cable, internet, and phone. Other third-party payments like Credit Suite, CRM, and software can be included.

LexisNexis Report

LexisNexis is a source where a number of the lenders denying funding applications get their information from. They provide info regarding likelihood to pay, or not.

Lenders compare LexisNexis information to what you put on your loan application. If the application and LexisNexis do not match, then loan providers will deny you a loan. They will see the variance as fraud.

SBFE

The SBFE gathers data on small businesses from its members, which are lending institutions. Lenders use this info to make credit decisions.

FICO SBSS

FICO uses its SBSS (Small Business Scoring Service) Score to combine consumer bureau, monetary, application, and business bureau information. FICO then validates their SBSS models for deals like Line of credit transactions, term loans, and commercial card obligations up to $1 million. The idea is to assess just how your small business pays off all sorts of loans.

Business credit providers and the SBA use the FICO SBSS score as a tool to decide whether they ought to authorize a loan to your company.

Identification Numbers

The CRAs use identification numbers to designate your corporation.

BIN # (Business Identification Number)

Experian’s BizSource assigns a BIN.

D-U-N-S #

Begin at the D&B website and get a free D-U-N-S number. If there is no D-U-N-S number, then there is no record and no PAYDEX score. Your D-U-N-S + 3 payment experiences gets you a PAYDEX score.

Business Credit History is Vital for Being Fundable in a Recession

Your business credit history is the single most important driver of your business credit scores. In turn, this influences fundability profoundly.

Late repayments will impact your business credit score for years. If you pay your corporate financial obligations off, as rapidly as possible and as completely as possible, you can make a very real difference in your credit scores. No other aspect of business management more directly impacts your business credit scores.

Make certain to pay on schedule and you will directly and positively impact fundability.

UCC Filings

If the business owner has poor personal credit, lenders will typically secure a UCC blanket lien if they give your business a loan.

A UCC blanket lien is a note which goes on your credit report. It states that the creditor has an interest in all your business’s assets till you pay off the loan in full. Hence, there may be dire consequences if you default.

These UCC filings are a matter of public record. Lenders and credit providers take them into consideration when determining if your business is fundable.

Judgments, Liens, and Bankruptcies

These are all a matter of public record, and they can all negatively impact fundability.

In addition to UCC blanket liens are any other kinds of liens as against your business assets. A lien is a credit provider’s right to retain possession of property belonging to till the debt owned by that person or company is discharged.

A lien isn’t quite the same thing as collateral. Rather, it’s the property which is subject to the lien is the collateral.

Total number of trade accounts and highest credit limit

These come from credit issuers which give you starter credit when you have none. Terms are frequently Net 30, versus revolving.

The more trade accounts, the better. In general, at least five to eight are necessary before moving onto credit cards which are harder to get. But pay attention to your highest credit limit.

Your highest credit limit is an important figure for credit issuers and lenders. For example, unsecured financing can result in a loan of 5 – 8 times the amount of your highest revolving credit limit account. So, by definition, the higher your highest credit limit, the more you can get from this form of financing.

Age of trade accounts

How long have your trade accounts been open? This should correlate more or less directly with your time in business. By getting trade credit ASAP, your trade accounts are as aged as they can be.

Financial data

Lenders and credit providers want to see your business’s financial data. Without this info, they will wonder if they can trust your statements about your business’s financial solvency. Increase fundability by providing this information when requested.

Open accounts

Opening and responsibly using company credit accounts can help you boost your available credit and enhance your credit rating. The key is to use your credit. Simply opening a lot of accounts and never using them is not going to do anywhere near as much to improve fundability.

Closed accounts

Closing accounts has a direct effect on overall credit history. If a card is closed and is in good standing, it will fall off a credit report eventually. And as soon as it’s gone, the history which went along with it is gone, too. A card in good standing can be closed by the card owner or by the credit provider if the card owner hasn’t been using the credit. This is different from a card closed in poor standing, where that information stays on your credit report for longer.

By closing accounts, you are tanking the average age of your accounts. It’s a part of fundability over which you have control. Simply use your credit and pay it back without delay. This way, your providers will not feel the need to close accounts for non-use.

Business Information to Make Your Business More Fundable in a Recession

The most crucial issue with your company info is to be absolutely certain it is consistent from document to document.

Business name and address, listed ownership, and contact information uniform

Congruency is a requirement in your company CRA records, as in all other areas.

Financial Statements

Many credit providers and lenders not surprisingly want to see your company’s financial statements.

Business Financials

Corporate financials include if your business is making a profit, as well as your financial estimates for the coming quarters.

Business tax returns

Some alternative lenders now offer credit lines for $50 – 150,000. They will typically only want tax returns versus all income documentation. For over $100,000, you must provide a P&L and a balance sheet.

The approval amount is commonly 10% of yearly sales per company tax returns.

Business financial statements (company/accountant prepared or audited)

Standard corporate financial statements include your income statement, a statement of retained earnings (AKA the statement of owners’ equity), company balance sheet, and a statement of cash flows.

It will considerably and favorably affect your fundability if you have them prepared or at least audited by an accountant or an accounting firm.

# of years tax returns filed

How long has your business been operating? And how many years has it been filing tax returns? Those numbers must be the same, even for years your company loses money.

Reported income and expenses

What is your company’s reported income? Do your reported expenses surpass your reported income? Are they commensurate with those anticipated from a business of your size, age, and industry?

Taxes up to date

Are your corporation’s taxes up to date? If payments to the IRS are slow and late, then lenders and credit providers will think your payments to them will follow the very same pattern.

Demolish your funding problems with 27 killer ways to get cash for your business. Get money even during the worst of a recession.

Personal Financials Can Decide If a Business is Fundable in a Recession

In particular for newer corporations, credit issuers and lenders will want to see your personal financials.

Personal financial statements

Can your personal financials be located? Do they show responsible financial stewardship?

Personal tax returns and how many tax returns can be offered

Are your personal tax returns in order? Can you put your hands on all or a minimum of the majority of your tax returns and supply them if requested? Do you file on time? If you need to pay, do you pay on time? If the answer to any one of these questions is no, then fundability is damaged.

Reported income and expenses

Are they proportionate with the kind of income and expenses anticipated from the owner of a corporation of your size, age, and industry?

Debt to income

This ratio is all of your monthly debt payments, divided by gross monthly income. This number is how lenders and credit providers measure your ability to pay back whatever you borrow. It is a vital part of the answer to their question – is your business fundable in a recession?

Child support and Criminal record Both Affect If a Business is Fundable in a Recession

Both affect fundability. Are you up to date on child support payments if you do not live with one or more of your minor children? Do you have a criminal record?

Bureaus and How They Help Determine If Your Business is Fundable in a Recession

Just like there are business credit reporting agencies, there are CRAs for personal credit.

Experian and Equifax

In addition to reporting on business credit, Experian and Equifax also report on personal credit.

TransUnion

Data Agencies and How They Determine If Your Business is Fundable in a Recession

There are companies which collect data and provide it to the personal credit reporting agencies.

ChexSystems

Some banks and other credit issuers use ChexSystems to get more information on your personal credit habits. They also report on insufficient funds, closed accounts, and overdrafts.

LexisNexis

Lenders use LexisNexis information to cross-check loan applications. They want to see if their loan criteria are being met. They want to determine if what you claim on your application jibes with the records. And they want to know if it’s likely your business will fail.

FICO

Personal Credit History

Much like your business credit history matters for calculating fundability, so does personal credit history.

Accounts over limit

If the number of accounts over limit is more than zero, it can tank your fundability.

Authorized users

Short sales

Some lenders may not forgive the unpaid balance on the mortgage. Some state laws let lenders seek deficiency judgments forcing you to repay the difference between the sale price and the balance due on the mortgage.

Lenders report a short sale to TransUnion, Experian, and Equifax as a charge off, settlement, deed-in-lieu of foreclosure, or loan settled for less than the amount due. How a lender reports the short sale can significantly impact the damage to your credit score.

A short sale will drop a personal credit score by up to 100-150 points. The higher your credit score to start, the more it will plummet.

Short sales can stay on your credit report for as long as seven years. But it isn’t as bad as a foreclosure or a bankruptcy.

Settled debt

Settled debt is a plus for fundability. It’s a huge part of the answer to the question of whether your business is fundable in a recession.

Foreclosures and late payments

Just like a bankruptcy, foreclosures negatively impact your fundability. And the larger and later your late payments are, and the more of them there are, the more they harm fundability.

Opened accounts

With fewer than five, your file may be seen as “thin” and it will negatively impact your fundability.

Financing facilities reported and history length

In general, major retailers and banks on a report correlate with a longer and more favorable personal credit history. But a shorter credit history is generally not seen as favorably as a longer one.

Inquiries

More than two recent inquiries will be seen as proof of credit shopping.

Utilization per credit card/line

Credit Utilization Rate is credit in use, divided by total available credit. Keep this ratio at about 30% or less. Experian checks utilization rate both overall and per credit card.

Bankruptcy

This is a court proceeding where a judge and a court trustee check your assets and liabilities. Personal bankruptcy tends to be conflated with a lack of personal financial responsibility.

Will an explanation to a credit provider or lender help with fundability? It’s worth the effort.

Application Process

Even the process of applying can have an impact on your fundability.

Application Submission

How are you submitting your application? What does your lender or credit provider prefer?

Timing

Your most recent three months’ worth of bank account management loom large. This is due to a number which banks keep but don’t publicize, the bank rating.

A bank rating measures the average minimum balance as kept in a business bank account over a three-month period. Therefore a $10,000 balance ranks as a Low-5, a $5,000 balance rates as a Mid-4, etc.

A small business’s chief goal ought to always be to keep a minimum Low-5 bank score (or, an average $10,000 balance) for at least three months. Without a minimum of a Low-5 score, most banks assume the business has little to no ability to pay off a loan or a business line of credit.

Lender negotiations and online, paper or in personal application

In particular, an application presented in person allows for a dialogue and negotiations. This is seen as the most serious and generally the most fundable. In person, a lender can directly assess the answer to their inquiry: how fundable is your business?

Lending product selected

Are you trying for a very large loan the first time around? You probably won’t get it. By proving your financial responsibility, lenders will be more likely to loan to you, and to loan you more.

Lender

Many lending institutions prefer working with certain industries. If the bank is more comfortable with your industry, then it will help your fundability cause.

Business ownership, name, and address verifiable

Ownership documents will prove your business ownership, name, and address and bolster your fundability.

Is Your Business Fundable in a Recession? On Balance

Keep all records consistent to your business can be fundable in a recession. Set up your business legitimately, with a domain, phone numbers, an address, and more. Get all ID numbers and register with the IRS. Set up your business bank account for fundability. Keep all business financials organized and have them prepared by a competent professional. Get your personal credit ‘house’ in order.

Being fundable means your business can get financing from a credit provider or lender. So, is your business fundable in a recession?

The post Being Fundable in a Recession appeared first on Credit Suite.

Recession Supply Chain Management in the Era of COVID-19

Conditions are changing on the fly. It’s hard to find certain products on the shelves. COVID-19 (the novel coronavirus) has utterly disrupted the supply chain. This is so even if you never received products or raw materials from Asia. And with the economy slipping, a recession seems a certainty. You need recession supply chain management.

Suddenly, You Need to Concern Yourself with Recession Supply Chain Management

Our world of business has changed. Right now, business owners are more concerned than ever before. Many are uncertain of what to do. It’s a time to be wondering about how to get the capital you need to grow, and whether it’s possible to survive and thrive. But you can!

Everything is Moving FAST These Days

Conditions are changing on the fly. Several states have already closed restaurants and bars and other nonessential businesses. Others are limiting gatherings, if they can get people to listen and do as requested. Still others have lockdowns in place. Stores are having trouble keeping stock on the shelves. Customers and prospects are getting jittery. But you can still build business credit. In fact, you should.

Supply chains are breaking down. If you get goods from China, they you’re already feeling the pinch. This includes if you only get one raw material from China. It can be harder to get basic supplies. Unfortunately, hoarding is a very real problem right now. But did you know that starter vendor business credit can save you?

Building Recession Supply Chain Management Right into Business Credit Building

Here’s how business credit is built. Having an EIN doesn’t mean you have established credit. If you go to a bank to try and get credit using your EIN with no credit established, you’ll ALWAYS get denied, guaranteed! That is unless you have good personal credit and use it for approval while supplying your personal guarantee. It doesn’t have to be that way. Now is the perfect time to get rolling with business credit. Take advantage of changed circumstances and strike while the iron is HOT.

Let’s look at building business credit the right way. You cannot start with high limits. First you must build starter trade lines that report (vendor credit). Then you’ll have an established credit profile. Then you’ll get a business credit score. With an established business credit profile and score you can start getting high credit limits. Acting now can only help you later.

Recession Supply Chain Management with Starter Vendor Credit

What is starter vendor credit? These trade lines are creditors who will give you initial credit when you have none now. These are often vendors who can give you basic business supplies such as shipping boxes, Outdoor work wear, Ink and toner, Office Furniture, and yes, paper goods! They often offer terms such as Net 30, instead of revolving. However, there are some revolving accounts which are still considered to be starter vendors.

Details

Here are the typical details on vendor credit accounts. So, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, such as within 30 days on a Net 30 account, or 60 days for a Net 60 accounts. Unlike with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used. To start your business credit profile the right way, you need to get approval for vendor accounts that report to the business credit reporting agencies. Once that’s done, you can then use the credit, pay back what you used, and the account goes on report to Dun & Bradstreet, Experian, or Equifax.

Once on report, then you have trade lines, and an established credit profile and score. With your newly established business credit profile and score, you can then get approval for more credit under your EIN. For vendor credit, you can leave your SSN off of the application. Then the credit issuer then pulls your EIN credit, sees a solid profile and score, and can then approve you for more credit. No matter what the economy is doing, this is very doable.

Not Using Your Social Security Number

Let’s look at what it means when you’re not using your Social Security Number. You can’t leave your SSN off bank loan applications or many other credit applications, if that credit is ultimately issued by a bank. This is because federal law requires a Social Security number on the application. It’s to prevent fraud. But for starter vendors, so long as it’s not through a bank, you can leave your SSN off the application. Just leave that field blank. Don’t fill in any other number, because if you do so, you’ve just broken two federal laws.

Learn more here and consult with us about getting started toward growing small business credit in a recession.

Starter Vendor Credit Benefits and How They Can Help You with Recession Supply Chain Management

Check out these starter vendor credit benefits. Vendor Credit is an important step in building business credit. Vendor Credit is easier to get than store or fleet credit. It can lead to more credit. Establishing credit will lead to lenders approving you. This process is proven to work! As we pause and regroup, it’s the perfect opportunity to build starter vendor credit.

Consider the process of building business credit. You will need to have credit to get more credit. Getting initial credit is the hardest part. Many trade vendors who issue credit don’t report it to the business reporting agencies – as in over 90%! So, you must find sources which actually report.

Vendor Credit to the Rescue for Better Recession Supply Chain Management

Here are three Companies which provide vendor credit and report to the business credit reporting agencies: Uline, Quill, and Grainger Industrial Supply.

And they can ALL help you get basic supplies, no matter how well your current supplier is stocked.

Uline

We talk about Uline a lot, and it’s for very good reasons. They sell shipping, packing and industrial supplies. They report to Dun & Bradstreet and Experian. You must have a D-U-N-S number and an EIN before starting with them. You need for an order to be $50.00 or more before they’ll report it. Your first few orders might need to be pre-paid to initially so your company can get approval for Net 30 terms.

To qualify, you need an entity in good standing with Secretary of State, your EIN number with the IRS, your business address (matching everywhere), a D-U-N-S number, your business license (if applicable), and a business bank account. Your application may get approval for net 30 at time of order. Upon final review, their Credit Department may change to a few prepaid orders, before granting Net 30.

How Can Uline Help You with Recession Supply Chain Management?

Here’s how Uline can help. Among many other things, they sell toilet paper and paper towels. You can get retail bags. New Hampshire, for example, is going to single-use to slow transmission of COVID-19. Other states may follow suit. But you may have to wait a few weeks to get your delivery. This is not usual for them, it’s just the current circumstances. Deliveries should speed up in the future. Note: due to high demand, you can only order nitrile gloves if you already have ordered them from Uline before. You can visit them at: uline.com.

Learn more here and consult with us about getting started toward growing small business credit in a recession.

Quill

Let’s look at Quill. They sell handheld computers, shipping supplies, cleaning supplies, and more. They report to Dun & Bradstreet. If you are not given a Net 30, they will ask you to do prepaid orders of $100.00. Normally any prepaid order won’t report. So you need for them to have given you a Net 30 account. Net 30 accounts require a $50.00 purchase to report.

To qualify, you need an entity in good standing with Secretary of State, your EIN number with the IRS, your business address (matching everywhere), a D-U-N-S number, your business license (if applicable), and a business bank account. A new business or businesses with no credit history may need to prepay until Net 30 approval.

How Can Quill Help You with Recession Supply Chain Management?

Here’s how Quill can help. Among many other things, they sell hand sanitizer, paper towels, and toilet paper. Due to high demand, delivery may be slower than usual. Currently, their $45 minimum for free shipping has been waived. Right now, everything they sell is shipping for free. You can visit them at: quill.com.

Grainger Industrial Supply

Check out Grainger Industrial Supply. They sell hardware, power tools, electrical supplies, pumps and more. And they also do fleet maintenance. They report to D&B. Orders must be $50.00 or more to go on report. Terms are Net 30.

To qualify, you need an entity in good standing with Secretary of State, your EIN number with the IRS, your business address (matching everywhere), a D-U-N-S number, your business license (if applicable), and a business bank account. They may ask for additional documents for approval. If a business doesn’t have an established credit, they will require additional documents like accounts payable, income statement, balance sheets, etc.

How Can Grainger Industrial Supply Help You with Recession Supply Chain Management?

Here’s how Grainger can help. Grainger remains committed to staying open. They’re currently sold out of hand sanitizer, and a lot of their face masks are sold out, but they do have toilet paper, Lysol, and rubbing alcohol. Some delivery estimates are faster than others. You can visit them at: grainger.com.

Recession Supply Chain Management: The Upshot

Times are changing rapidly. But one constant in life is business credit building. Starter vendors can supply a lot of what you need right now. So consider changing your supply chain and build business credit while weathering the current storm. Get paper goods, cleaning supplies, and so much more. Our Business Finance Suite has even more starter vendors. We’re all in this together.

Learn more here and consult with us about getting started toward growing small business credit in a recession.

The post Recession Supply Chain Management in the Era of COVID-19 appeared first on Credit Suite.

Fundability and How it Helps During Recession 2020

Get through recession 2020 even though loan risk factors abound. But you can fix a lot of them with assuring fundability. The easiest way to do this is via building business credit. but first, let’s look at what a bank is going to want to know. they want to assess what sorts of small business loan risk factors you bring to the table.

Get By Recession 2020 and Answer Lender Questions and Address Small Business Loan Risk Factors With Fundability

Fundability – or, not just the ability to become funded but how desirable a company is for funding – means different things to banks, venture capitalists, angel investors, and informal investors. That being said, they all agree on a few fundamental principles.

1. Do You Have Positive Cash Flow?

Lenders aren’t in the business of giving you gifts. Instead, they would like to see a profit on their investment. For that reason, if you are bleeding funds, they are not going to want to pay for a piece of what, to their minds, is an unsatisfactory financial commitment.

How do you turn it around? Do some economic triage. Perhaps your firm will not need to have an alternative site. Perhaps you don’t need to have a full-time assistant when part-time will do. Maybe you should be leaning harder on your customers with pending invoices. This is one of the biggest small business loan risk factors.

Start-ups will get a different question – see # 2.

2. Do You Have a Great Product or Service?

For startup companies, the concern is more like: do you have a fantastic product or service? A concept in itself is not going to be sufficient, so you also will want to have a comprehensive business system in place. Investors are going to want to see what you can do with your amazing idea, and how it can be successfully monetized.

For a brand-new company this is the biggest of all loan risk factors. Otherwise, why bother making a company at all? Particularly during Recession 2020.

3. What Will You Use the Cash For?

If your reply is an unclear, “general fund”, investors are not going to be showing an interest. First of all, they want you to demonstrate you will be responsible with their money. In addition, they also want to know that your business is organized. You can be the most innovative and the very least business-oriented man or woman out there, so long as anyone in your organization is dealing with the financial heavy lifting. Somebody must make sure that the taxes are paid and the invoices go out to your clients.

Investors don’t actually want to see you using the funds for daily operations. If your business is functioning profitably (see # 1), then investors will expect that you can manage those expenses. Rather, they want to see if you are going to employ their funding for something new and different. In general, this implies you must be using their funds for improvement – a new piece of essential machinery; a new shop; a second facility; a new product line – these are just a few plans which would fit the bill for progress.

See # 4 for the similar question for startups. This is another one of the bigger loan risk factors. Lenders want to know their money isn’t being thrown away. After all, they make a lot more money if you pay your loan off and pay interest. Getting their money back through collections is a lot less profitable for them. And they are going to be looking to maximize their returns during Recession 2020.

4. How Much Funding Do You Need to Reach Positive Cash Flow?

For startups, a similar question is: just how much funding will you need to get to positive cash flow and profitability? In this case, your use for the money is still a distinct one – it’s to bring your new business to profitability.

5. How Much Revenue Yearly Can Your Business Generate After Three Years?

This question is the same whether you are presently in business or you are aiming to get a startup business funded. This will separate the lifestyle businesses (designed to make their owners glad but not develop into bigger players) from the scalable businesses. A lifestyle business normally won’t get this sort of funding. Instead, it will be funded by virtue of secured debt or bootstrapping or secured debt.

A scalable business can still be modest and not expect explosive growth, but still be fundable. Your new widget warehouse might begin small. Investors would expect it to have more moderate funding needs.

6. What Number of Your Existing Clients, Channels, and Partners Will Support Your New Business Growth and Volume?

Introducing new markets (or going for new customers or trying to market new products) will be viewed as riskier, unless you have an established history of financial success via pioneering. See # 7 for the semi-comparable question for startup ventures.

7. How Do You Know That Anybody Will Buy Your Product or Service?

If you do not know your market, then you will not know how to target to those customers. If your clients are middle-aged women, they will most likely respond to different techniques than if your customers are teen boys. Merely making a product and flinging it out to the ether, praying someone will buy it, is not going to sit well with investors. Instead, they want you to have scouted out your prospective clientele prior to you coming knocking and asking for funding.

The rest of the questions are only for startups.

8. How Much Funding Can You Get From Friends and Family to Launch Your Business?

Oftentimes these are your most important investors, or they might be your only investors. Treat them well. This goes double in Recession 2020.

9. How Much Funding Can You Personally Add?

Investors would like to know this amount because it indicates a commitment to the startup. If you want to keep your life savings, you’ll be a lot more careful with funds than if you’re just playing around with other people’s money. Of course you should be even more careful during Recession 2020.

10. Who Comprises Your Team?

Your team does not have to be employees of your business. It can also be consultants and mentors. Contact your school. There might be an educator interested in your new business, even if you never took a class with that person. Not a college alum? Try your nearby community college just the same. A professor might even want to use your company experience and story in a lecture.

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

But How Do You Best Address These Risk Factors During Recession 2020? Build Business Credit!

Small business credit is credit in a business’s name. It doesn’t connect to an entrepreneur’s consumer credit, not even if the owner is a sole proprietor and the only employee of the business.

Because of this, a business owner’s business and personal credit scores can be very different.

Consumer credit scores depend upon payments but also other elements like credit usage percentages.

But for small business credit, the scores truly only hinge on whether a business pays its debts promptly.

The Process

Building company credit is a process. It does not occur automatically. A company has to proactively work to develop small business credit.

Having said that, it can be done readily and quickly, and it is much quicker than building personal credit scores.

Vendors are a big component of this process.

Doing the steps out of order leads to repetitive denials. Nobody can start at the top with small business credit. For instance, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.

Company Fundability

A business needs to be fundable to credit issuers and vendors. This is the best way to address any small business loan risk factors.

Hence, a business needs a professional-looking website and e-mail address. And it needs to have site hosting bought from a vendor like GoDaddy.

Additionally, company telephone and fax numbers need to have a listing on 411. You can do that here: http://www.listyourself.net.

In addition, the business phone number should be toll-free (800 exchange or similar).

A business also needs a bank account dedicated solely to it, and it has to have all of the licenses essential for running.

Licenses

These licenses all must be in the perfect, accurate name of the company. And they need to have the same small business address and phone numbers.

So note, that this means not just state licenses, but possibly also city licenses.

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

Working with the Internal Revenue Service

Visit the IRS web site and get an EIN for the business. They’re totally free. Choose a business entity like corporation, LLC, etc.

A company can start off as a sole proprietor. But they more than likely want to change to a variety of corporation or an LLC.

This is to decrease risk. And it will make best use of tax benefits.

A business entity matters when it pertains to taxes and liability in case of litigation. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. Nobody else is responsible.

Incorporating is a great way to address small business loan risk factors.

Kicking Off the Business Credit Reporting Process

Begin at the D&B website and get a free D-U-N-S number. A D-U-N-S number is how D&B gets a business into their system, to generate a PAYDEX score. If there is no D-U-N-S number, then there is no record and no PAYDEX score.

Once in D&B’s system, search Equifax and Experian’s sites for the business. You can do this at www.creditsuite.com/reports. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.

In this manner, Experian and Equifax have something to report on.

Starter Vendor Credit

First you ought to build trade lines that report. This is also called starter vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.

And with an established business credit profile and score you can begin to get credit at even more establishments.

These kinds of accounts have the tendency to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.

But to start with, what is trade credit? These trade lines are credit issuers who give you starter credit when you have none now. Terms are commonly Net 30, rather than revolving.

Therefore, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.

Details

Net 30 accounts have to be paid in full within 30 days. 60 accounts need to be paid completely within 60 days. Compared to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.

To start your business credit profile the right way, you need to get approval for vendor accounts that report to the business credit reporting agencies. When that’s done, you can then make use of the credit.

Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.

You want at least 3, preferably 5 to 8 of these to move onto the next step, retail credit. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/

Note: it can often be possible to apply for starter vendor credit without your Social Security number. Try it by leaving that section blank, or applying over the phone.

Retail Credit

Once there are at least 3 vendor trade accounts reporting to at least one of the CRAs, then move onto retail credit. These are stores, and they can be either net accounts or revolving.

Just use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the small business’s EIN on these credit applications – if you can.

Fleet Credit

Are there something like 8 to 10 accounts reporting? Then move onto fleet credit. These are businesses such as BP and Conoco. Use this credit to buy fuel, and to repair, and take care of vehicles. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the business’s EIN. But that is only if that’s possible. It isn’t always possible. So, this is because federal law requires SSNs on anything to do with banks. If a card ultimately comes from a bank, then a Social Security number is necessary, no matter what.

Learn more here and get started with building business credit with your company’s EIN and not your SSN. Get money even in Recession 2020!

More Universal Credit

Have you been sensibly managing the credit you’ve up to this point? Then move onto service providers like Visa and MasterCard. Only use your Social Security Number and date of birth on these applications for verification purposes. This is a federal law requirement. For credit checks and guarantees, see if you can use your EIN instead.

These are commonly MasterCard credit cards. If you have 14 trade accounts reporting, then these are more likely to be attainable.

Monitor Your Business Credit

Know what is happening with your credit. Make certain it is being reported and address any mistakes as soon as possible. Get in the practice of checking credit reports and digging into the particulars, and not just the scores.

We can help you monitor business credit at Experian and D&B for only $24/month. See: www.creditsuite.com/monitoring.

At Equifax, you can monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. That will cost about $19.99.

Update Your Information

Update the details if there are inaccuracies or the details is incomplete.

Fix Your Business Credit

So, what’s all this monitoring for? It’s to contest any inaccuracies in your records. Mistakes in your credit report(s) can be fixed. But the CRAs often want you to dispute in a particular way.

Disputes

Disputing credit report inaccuracies typically means you send a paper letter with copies of any proof of payment with it. These are documents like receipts and cancelled checks. Never mail the originals. Always mail copies and retain the original copies.

Fixing credit report inaccuracies also means you specifically spell out any charges you dispute. Make your dispute letter as understandable as possible. Be specific about the issues with your report. Use certified mail to have proof that you sent in your dispute.

Taking the initiative and handling any errors as fast as possible will also help address any small business loan risk factors.

A Word about Building Business Credit

Always use credit sensibly! Don’t borrow beyond what you can pay back. Track balances and deadlines for payments. Paying off promptly and completely does more to boost business credit scores than just about anything else. And beyond that, responsible account management will counter any small business loan risk factors.

Establishing company credit pays. Great business credit scores help a small business get loans. Your loan provider knows the business can pay its debts. They know the business is for real.

The company’s EIN links to high scores and lending institutions won’t feel the need to call for a personal guarantee.

Getting Through Recession 2020: Takeaways

Business credit is an asset which can help your business in years to come. Learn more here and get started toward establishing company credit. And stop worrying about Recession 2020!

The post Fundability and How it Helps During Recession 2020 appeared first on Credit Suite.

Stock Exchange Trading Tip – Personal Balanced Stock Portfolios Defend Against Recession

Stock Exchange Trading Tip – Personal Balanced Stock Portfolios Guard Against Recession

Producing an uniformly well balanced financial investment profile by separating properties amongst such varied courses as supplies both residential and also international, bonds, common funds, realty, cash money matchings, as well as exclusive equity can assist defend against economic downturns. Figuring out just how much to buy each property team relies on the financier’s specific scenario as well as future demands.

There have actually been times when supplies are unpleasant contrasted to various other possessions. The careful financier might have weathered this circumstance by expanding supply financial investments right into actual estate financial investments or various other kinds confirmed to be much less dangerous.

Making significant modifications in one’s profile need to be done at different phases in the financier’s life. This capitalist’s profile would certainly be primarily spent in the riskier possessions such as meticulously investigated residential as well as international supplies.

As retired life techniques, possibly 10 years in the past, the financier needs to begin expanding holdings right into income-oriented possessions. Specific blue chip supplies with lengthy, tried and tested track documents of reward settlements can likewise be consisted of as an income-oriented property. Annual, as retired life methods, a bigger percent of the capitalist’s profile need to be income-oriented till that total amount is 100% at retired life.

There have actually been times when supplies are unsightly contrasted to various other possessions. The cautious capitalist might have weathered this scenario by branching out supply financial investments right into genuine estate financial investments or various other kinds shown to be much less dangerous.

Specific blue chip supplies with lengthy, tried and tested track documents of returns repayments can additionally be consisted of as an income-oriented property.

The post Stock Exchange Trading Tip – Personal Balanced Stock Portfolios Defend Against Recession appeared first on ROI Credit Builders.

Ride the Rapids: Your Essential Guide to Accessing Unique Recession Business Funding Opportunities Related to Coronavirus

Here is what we all know. COVID-19 is having a huge impact on the economy. It’s no secret. The market is scary right now. In fact, you are probably thinking now is not the time to make any big financial decisions about your business. But the truth might surprise you. In contrast, it could actually be a really good time to borrow. This is because of federal and state initiatives to help businesses during this time. There are some unique recession business funding opportunities available.

Beyond that, more are becoming available each day. In addition, some oldies but goodies are better options now than they were even a few days ago. There are federal government loans for small business.

You probably know how to prepare for a recession. But you probably weren’t expecting to see the effects of recession on business in less than a month. The impact of recession on businesses is already being felt. But there are recession resistant businesses out there. Let’s make sure yours is a recession proof small business.

The Ultimate Directory for Everything you Need to Know about Recession Business Funding Opportunities During the Coronavirus Pandemic

The federal government does not want to see a collapse of the economy any more than we do. They want to do what they can to help small businesses. As a result, they are taking steps to do just that.

States are doing the same. What steps are being taken? What do they mean for your fundability? It means you need to protect it like never before. To do this, you will need to know what help is available to you and your business.

The key is going to be figuring out how to strategically use the funding available right now to not only save your business, but to help it thrive.

Want to review your options with one of our consultants? Give us a call at 877-600-2487.

Recession Business Funding Opportunities: The Bad News

Then there’s the bad news. Businesses are closing. People aren’t going out. Spending is vastly curtailed. Unfortunately, without a steady flow of income, eventually businesses will not be able to make payments on existing expenses & debt.

While some businesses may be able to make current payments for a few months, access to new credit will likely not be around for long, at least when it comes to traditional banks.

But There’s Good News, Too

The good news in light of all of this darkness is that no one wants this to happen. Measures are being taken to try and stop the spiral. The most notable is the rate cut by the Federal Reserve. In fact, the most recent cut brought the rate down to 0%. Interest rates during recessions should be cut, and we are already there.

As a result, some states are even initiating their own programs to offer relief to businesses during this time. Not only that, but corporations and charities are jumping in with relief for workers. Truly, the key to surviving is to take advantage of the recession business funding opportunities available right now. Then, use them to protect your fundability, and your business. Turn yours into a recession resistant business.

Recession Business Funding Opportunities: Federal Initiatives

As you might imagine, the federal government is working on several options to help businesses during this time. One idea is a cut in the payroll tax. Another is to provide cash to each American to increase spending. Currently, SBA loans are getting an increase from the relief fund for COVID-19. So far $50 billion is going into the SBA as relief in March of 2020. Also, the SBA is waiving upfront costs on business loans for veterans, up to $1 million, in the SBA Express program.

Recession business funding opportunities via the feds will be in the trillions. There may be federal grant money. This situation is fluid, so there could be rural development grants. And they don’t have to be for businesses that make money during a recession.

SBA Disaster Relief

Currently, the SBA is permitted to exercise readily available authority. They will supply funding to businesses affected by the coronavirus to help overcome disruptions. The President is asking Congress to raise financing for this program. For now, the goal is to make 30 million small businesses better able to survive the coronavirus impact. The idea is to turn many into businesses that do well in a recession.

The Details

Here is what you need to know about the process for accessing these funds according to SBA.gov.

When they get a request from a Governor, the SBA will issue an Economic Injury Disaster Loan Injury Declaration.

This will make loans available to small businesses to help relieve the financial troubles caused by Coronavirus.

The Office of Disaster Assistance will work with the Governor to submit the request for assistance.

Allowable uses of these funds include:

- Pay current debts
- Payroll
- Accounts payable
- Pay other bills that the business will not be able to pay due to the coronavirus impact

The credit rate is 3.75%, or 2.75% for non-profits

Businesses with credit available elsewhere are not eligible.

In order to keep payments affordable, terms go up to 30 years. Determination on individual loan terms will be made on a case-by-case basis. The borrower’s ability to repay will play a role in this decision

The Economic Injury Disaster Loans are just a part of the big picture of the federal government’s plan for relief.

More Information on These Federal Small Business Loans

Small Business Administration loans and grants may expand. We could end up with all kinds of government small business grants. But we don’t yet clearly know the details on grants and loans for small businesses. That is, for any from a federal grant department.

Federal Housing Relief

Likewise, the federal government is offering relief to families in the form of relief to homeowners. Last week, the President directed HUD to suspend evictions and foreclosures. This applied to single-family home mortgages that are backed by Fanny Mae and Freddie Mac for at least 60 days. It’s a creative form of financial aid for small business.

This week, it was announced that both mortgage insurers will give multifamily landlords a break on their loans. That is, if they do not evict anyone that has suffered coronavirus impact. FHFA Director Mark Calabria said in a press release

“Renters should not have to worry about being evicted from their home, and property owners should not have to worry about losing their building, due to the coronavirus. The multifamily forbearance and eviction suspension offered by the Enterprises should bring peace of mind to millions of families during this uncertain and difficult time.”

Want to review your options with one of our consultants? Give us a call at 877-600-2487.

Recession Business Funding Opportunities by State

How to Find Recession Business Funding Opportunities in Your State

These posts also contain information on how to start a business in each state. Now is the time to try your recession proof business idea.

Alabama	Alaska	Arizona	Arkansas	California
Colorado	Connecticut	Delaware	Florida	Georgia

Hawaii	Idaho	Illinois	Indiana	Iowa
Kansas	Kentucky	Louisiana	Maine	Maryland

Massachusetts	Michigan	Minnesota	Mississippi	Missouri
Montana	Nebraska	Nevada	New Hampshire	New Jersey

So make sure to check if your state has recession business funding opportunities for your recession proof business ideas!

New Mexico	New York	North Carolina	North Dakota	Ohio
Oklahoma	Oregon	Pennsylvania	Rhode Island	South Carolina

South Dakota	Tennessee	Texas	Utah	Vermont
Virginia	Washington State	West Virginia	Wisconsin	Wyoming

District of Columbia (Washington, DC)

State by State Responses to the Novel Coronavirus: Recession Business Funding Opportunities

First, let’s look at what each state is offering as coronavirus relief. They are stepping up their game. In fact, most are offering either funds or tax relief. Yet, some are even offering extensions on debts. Still, the details are continually changing. As a result, states’ plans are in flux. Check with state government websites for details and updates on government business loans. State by state, here’s what’s happening as of today. There are a lot of recession business funding opportunities out there. Many states are stepping up with government funding for business.

Alabama’s Response to COVID-19

Alabama has taken the following steps. On March 13, Governor Kay Ivey declared a state of emergency. The Governor has submitted a request to the SBA for Economic Injury Disaster Loans.

Alaska’s Response to COVID-19

Here’s how Alaska is handling the COVID-19 situation. On March 17, Governor Mike Dunleavy announced the creation of an Alaska Economic Stabilization Team. A bipartisan group of leaders will work with the Dunleavy administration. The goal is a plan to protect the state’s economy from the impact of COVID-19.

Leading the group will be former Governor Sean Parnell. Former US Senator Mark Begich will join. The remaining seats will be filled by a cross section of Alaska’s economic leaders and former elected officials.

Arizona’s Response to COVID-19

Arizona has the following response to the novel coronavirus. On March 11, Governor Doug Ducey declared a state of emergency. The Arizona Department of Health Services can now waive licensing requirements to provide healthcare officials with assistance in delivering services. The Governor has communicated with the SBA, seeking an Economic Injury Disaster Loan declaration. This will make it possible to get government backed small business loans.

Arkansas’s Response to COVID-19

Here is Arkansas’s response. On March 11, Governor Asa Hutchinson declared a state of emergency. The Governor put in a request to the SBA for Emergency Disaster Loans. They are also using state funds and grants to provide relief.

California’s Response to COVID-19 (with Recession Business Funding Opportunities)

This is how California is handling the COVID-19 situation. The city of San Francisco has started the COVID-19 Small Business Resiliency Fund.

To be eligible for the COVID-19 Small Businesses Resiliency Fund, small businesses must have at least 1 employee. Also,they can have no more than 5 employees. Plus, they must demonstrate a loss of revenue of 25% or more. They must have less than $2,500,000 in gross receipts as well. In addition, they must be engaged in activities regulated by the City and County of San Francisco. Of course, they need to have a license or permit associated to that regulation.

In California, employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension from the EDD to file their state payroll reports and deposit state payroll taxes. This is without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.

Colorado’s Response

Colorado is working toward COVID-19 as well. For example, the Pikes Peak SBDC is the lead for statewide disaster preparedness efforts in response to COVID-19. Also, the Colorado government offers work sharing as an alternative to laying off employees.

Requirements and qualifications for employers include reduced normal weekly work hours by at least 10%. But the reduction can be by no more than 40%. The reduction must affect at least two out of all employees in the business. Or a minimum of two employees in a certain unit. You must have paid as much in premiums as Colorado paid your former employees in unemployment insurance benefits.

Connecticut’s Response

Connecticut has this plan for handling COVID-19. On March 16, the SBA approved Governor Ned Lamont’s request to begin offering disaster-relief loans to Connecticut small businesses and nonprofits. Companies in the state can now apply for small business financial help of up to $2 million. There is a special page for this on the SBA website.

Delaware’s Response to COVID-19

Delaware is not falling short on doing something about COVID-19. On March 17, Governor John Carney submitted an application for the SBA to provide Delaware an Economic Injury Declaration. This makes loans available to small businesses and nonprofit organizations in New Castle, Kent and Sussex counties.

Florida’s Response to COVID-19 (with Recession Business Funding Opportunities)

Florida is taking the following steps to offer relief from the impact of the novel coronavirus. The Florida Small Business Emergency Bridge Loan Program is available to small business owners in all Florida counties. This is statewide to all those that experienced economic damage as a result of COVID-19.

Short-term, interest-free working capital loans are intended to bridge the gap between the time a crisis hits and when a business has longer term recovery resources available[AF1] . Loans under this small business financing program are short-term debt loans made by the state of Florida using public funds. They are not government grants.

Georgia’s Response to COVID-19

This is what Georgia is doing about COVID-19. On March 16, Governor Brian Kemp declared a public health state of emergency. Georgia has qualified for SBA Economic Injury Disaster Loans.

Hawaii’s Response to COVID-19 (with Recession Business Funding Opportunities)

Hawaii is taking these steps in response to the novel coronavirus. Hawaii’s House Resolution No. 54 established the House Select Committee on COVID-19 Economic and Financial Preparedness. The committee will work with representatives from local and state government. They will include private industry and nonprofits to inform the House of Representatives on the State’s economic and financial preparedness.

The Select Committee is tasked with examining economic and financial issues. That includes identifying the potential economic and financial impact to the state. So it also includes developing short-term and long-term mitigation plans. In addition, they will be monitoring COVID-19 conditions and outcomes.

Due to Hawaii’s unique position in reliance on tourism, you should expect for this committee’s mandate to broaden.

Idaho’s Response to COVID-19 (with Recession Business Funding Opportunities)

How is Idaho is handling COVID-19? On March 13, Governor Brad Little declared a state of emergency. The Governor also created a Coronavirus Working Group. So this group meets at least weekly to support the work of Idaho’s public health agencies. And they will increase coordination and communication around the many aspects of the issue.

The Joint Finance-Appropriations Committee approved Governor Brad Little’s request to transfer $2 million to the Governor’s Emergency Fund to help in Idaho’s response. But it does not appear that they have earmarked these funds at all for small businesses. This may change in time.

Illinois’s Response to COVID-19

What is Illinois doing about the COVID-19 situation? On March 9, Governor JB Pritzker issued a disaster proclamation giving the state access to federal and state resources to combat the spread of the virus. The state of Illinois is also releasing recommendations for an infectious disease outbreak response plan.

Indiana’s Response to COVID-19

This is what Indiana is doing to address COVID-19. On March 16, Governor Eric Holcomb announced restaurants, bars, and nightclubs would have to close. Unemployment claimants can do everything online and are not required to be there in person.

The SBA issued a disaster declaration for Indiana, offering financial assistance for Hoosier small businesses impacted by COVID-19. Small businesses, small agricultural cooperatives, and nonprofits across the state are eligible. So they can apply for low-interest loans up to $2 million. This is to help overcome the temporary loss of revenue due to COVID-19.

Business owners can use these loans to pay fixed debts, payroll, accounts payable and other bills. Loan interest rates for small businesses and nonprofits are 3.75% and 2.75%, respectively, with terms up to 30 years.

Iowa’s Response to COVID-19

Here’s how Iowa is handling COVID-19. Iowa is encouraging employers to participate in a voluntary work-sharing arrangement. This is as an alternative to layoffs. Employer accounts will not be charged for benefits paid under the VSW program directly or indirectly related to COVID-19.

In addition, eligible small business grants in amounts ranging from $5,000 to $25,000 are now available. The new program also includes a deferral of sale and use or withholding taxes due. And it has a penalty and interest waiver.

Eligibility requires:

Business disruption due to the coronavirus pandemic
Employment of 2-25 people before March 17, 2020

These Small Business Relief Grants will help businesses that are eligible maintain operations or reopen for business when this is all over. The funds cannot be used to pay debts acquired before March 17,2020.

Grant applications will go through a review process by the Iowa Economic Development Authority. They will determine the grant amount by the level of impact. This will include loss of sales revenue and workers.

Tax assistance applications will go through review by the Iowa Department of Revenue. They will determine if deferral and waiver is appropriate.

Kansas’s Response to COVID-19

This is what Kansas is doing about the coronavirus. On March 12, Governor Laura Kelly declared a state of emergency. The Governor has also temporarily prohibited utility and internet disconnects.

Kentucky’s Response to COVID-19

This is what Kentucky is doing about COVID-19. On March 6, Governor Andy Beshear declared a state of emergency. Public-facing facilities can only stay open if six-foot minimum social distancing is possible. The Commonwealth also provided guidelines for correctional facilities.

On March 16, Kentucky filed an application for an economic injury disaster loan declaration to get access to small business disaster assistance loans from the SBA. These loans will be for up to $2 million to small businesses affected by COVID-19.

Louisiana’s Response to COVID-19

Here is how Louisiana is dealing with COVID-19. From March 13 – 16 there was a declaration. And then there were two additions to it. Governor Mark Bel Edwards declared a state of emergency. Legal deadlines were postponed until at least April 13. Driver’s license expiration dates are postponed until May 20.

Maine’s Response to COVID-19 (with some Recession Business Funding Opportunities)

Maine is taking action as well. On March 17, Governor Janet Mills and the Maine Department of Health and Human Services (DHHS) took immediate steps to ensure access to critical services and benefits for Maine people, while protecting the health of employees and the public in response to COVID-19.

First, MaineCare will waive all copays for prescriptions, office visits, emergency department visits, radiology and lab services. Also, all Bureau of Motor Vehicles offices are closed until further notice.

In addition, the SBA has approved Maine’s March 16 application for SBA Economic Injury Disaster Loans to help Maine businesses overcome any temporary loss of revenue due to COVID-19.

Maryland’s Response to COVID-19

On March 5, Governor Larry Hogan declared a state of emergency and a catastrophic health emergency. On March 17, the Governor announced significant reductions in local and commuter bus, and light rail services to slow the spread of the virus.

If an employee receives unemployment benefits as a result of a coronavirus-related business shutdown, the employer’s unemployment taxes could increase. Unemployment benefits are proportionately charged to each employer based on weeks worked and wages earned in each individual’s base period.

Contributory employers could see an increase in their tax rate, which would result in higher taxes.But reimbursing employers will not be charged dollar for dollar for benefits paid. This should help avoid higher than expected unemployment costs.

There has been a March 23, 2020 update.

Massachusetts’s Response to COVID-19 (with Recession Business Funding Opportunities)

On March 16, Governor Charlie Baker announced a $10 million small business recovery loan fund to help companies struggling because of efforts to slow the coronavirus.

The fund will provide emergency capital up to $75,000 to Massachusetts-based businesses with under 50 full- and part-time employees. This includes nonprofit groups. Loans are immediately available to eligible businesses. No payments are due for the first six months.

Michigan’s Response to COVID-19

On March 16, Governor Gretchen Whitmer temporarily expanded eligibility for unemployment benefits.

Benefits are extended to workers with an unanticipated family care responsibility. This includes those who have childcare responsibilities due to school closures. Or who are forced to care for loved ones who become ill. It also covers workers who are sick, quarantined, or immunocompromised. This is if they are with no access to paid family and medical leave or are laid off. It also covers first responders in the public health community who become ill or are quarantined due to exposure to COVID-19.

Load restrictions are suspended for deliveries that meet immediate needs for medical supplies and equipment. This is for supplies related to the testing, diagnosis, and treatment of COVID-19.

They are also suspended for supplies and equipment necessary for community safety, sanitation, and the prevention of community transmission of COVID-19. These are items such as masks, gloves, hand sanitizer, soap, and disinfectants.

Other suspensions include those related to food for the emergency restocking of stores. Also, those related to equipment, supplies, and persons necessary to establish and manage temporary housing, quarantine, and isolation facilities related to the COVID-19 emergency.

These changes also cover persons designated by federal, state, or local authorities for medical, isolation, or quarantine purposes and persons necessary to provide other medical or emergency services, the supply of which may be affected by the COVID-19 emergency.

Michigan and the SBA

On March 17, the Governor applied for disaster relief for small businesses from the SBA. The Small Business Association of Michigan is encouraging the state to use the Business Interruption Insurance system to help those affected.

Under the proposal, businesses could apply for reimbursement from the state or the Michigan Strategic Fund. It would be processed through the existing Business Interruption Insurance system or the Michigan Department of Insurance and Financial Services.

Minnesota’s Response to COVID-19

Similarly, here is how Minnesota is handling the coronavirus situation. On March 13, Governor Tim Walz declared a peacetime emergency. Several places of public accommodation are closed. Beyond taverns and restaurants this also includes: hookah bars and vaping lounges, amusement parks, and country clubs.

For businesses which must lay off workers, the Governor ordered that the Minnesota Unemployment Insurance Program not use unemployment benefits paid as a result of the COVID-19 pandemic in computing the future unemployment tax rate of a taxpaying employer. This should keep tax rates down for employers.

Mississippi’s Response to COVID-19

On March 14, Governor Tate Reeves declared a state of emergency. As of March 17, Mississippi courts are restricting the size of gatherings in the state’s courtrooms for eight weeks to help slow the spread of the virus. Utility shutoffs are prohibited for the next 60 days.

Missouri’s Response to COVID-19

Along the same lines, here’s how Missouri is handling COVID-19. On March 13, Governor Michael Parson declared a state of emergency. The Governor also directed the Missouri State Emergency Management Agency and the Missouri Department of Economic Development to seek assistance for Missouri businesses through the SBA’s Economic Injury Disaster Loan program.

Montana’s Response to COVID-19

This is what Montana is doing about COVID-19. On March 10, Governor Steve Bullock declared a state of emergency. Uninsured Montana residents will be covered for COVID-19 testing and treatment. Employees laid off as a result of shutdowns due to COVID-19 are eligible for unemployment benefits. On March 17, the state became eligible for disaster relief loans from the SBA for small businesses.

Nebraska’s Response to COVID-19

On March 13, Governor Pete Ricketts issued a state of emergency. On March 17, the Governor issued an executive order to loosen unemployment eligibility restrictions. Nebraska has a COVID-19 hotline for information on the virus and government response.

In addition, Nebraska small businesses are eligible for disaster loans from the SBA.

Nevada’s Response to COVID-19

On March 17, Governor Steve Sisolak ordered a shutdown of nonessential businesses, including casinos and retail stores, for 30 days. The Gaming Control Board offered procedures for closing casinos. Also, low-interest loans will be available from the SBA for businesses to address debt, payroll or other bills.

New Hampshire’s Response to COVID-19

New Hampshire has taken measures as well. On March 17, Governor Chris Sununu banned all landlords from starting eviction proceedings and prohibited all foreclosures during the state of emergency initiated in response to COVID-19.

He also barred utility providers, such as electric, gas, water, telephone, cable, fuel and internet, from disconnecting service for nonpayment.

New Hampshire small businesses are eligible for disaster loans from the SBA. The state is switching to single-use bags for now. That means businesses may not be allowing reusable bags in stores.

New Jersey’s Response to COVID-19

The New Jersey Economic Development Authority , or NJEDA, has a portfolio of loan, financing, and technical assistance programs available to support small and medium-sized businesses.

Currently, several State agencies are engaging with local business leaders, local financial institutions, and business advocacy groups as well. Basically, this is to better understand what supports would have the most impact to ensure business and employment continuity.

New Mexico’s Response to COVID-19

On March 11, Governor Michelle Lujon Grisham declared a state of emergency. Then, on March 23rd the governor ordered a Shelter In Place for the entire state. New Mexico has qualified for the SBA Disaster Loan Assistance program to assist businesses negatively impacted by the COVID-19 public health emergency.

This includes low-interest federal disaster loans up to $2 million. The funds are to provide working capital to small businesses and non-profit organizations suffering substantial economic injury as a result of COVID-19.

New York’s Response to COVID-19

On March 8, New York City Mayor Bill DeBlasio announced the City will provide relief for small businesses across the City seeing a reduction in revenue because of COVID-19. Businesses with fewer than 100 employees who have seen sales decreases of 25% or more will be eligible for zero interest loans of up to $75,000 to help mitigate losses in profit.

The city is currently on a lockdown. Since New York is now a major site for the novel coronavirus, expect more changes soon.

New York State (Outside New York City)

On March 17, Senator Pam Helming and Assemblyman Colin J. Schmitt called for the establishment of a $890 million Small Business Emergency Assistance Fund for the State of New York. The $890 million would come from state settlement funds that are currently earmarked for use during economic uncertainty.

North Carolina’s Response to COVID-19

On March 17, Governor Roy Cooper ordered bars and restaurants closed to sit-down service. The Governor’s order also lifted some restrictions on unemployment benefits to help workers unemployed due to Covid-19 and those who are employed but will not receive a paycheck. Additionally, it adds benefit eligibility for those out of work because they have the virus or must care for someone who is sick.

North Carolina businesses are eligible for disaster loans from the SBA.

North Dakota’s Response to COVID-19

This is what North Dakota is doing about COVID-19. On March 13, Governor Doug Burgum declared a state of emergency.

North Dakota is seeking eligibility for emergency disaster loans for small businesses from the SBA. Small businesses will need to fill out an economic injury worksheet which will help the state qualify.

Ohio’s Response to COVID-19

On March 9, Governor Mike DeWine declared a state of emergency. As a result, the Ohio Department of Health prohibits mass gatherings of 100 or more persons.

Ohio is eligible for emergency disaster loans from the SBA. It is estimated that about 1,400 small businesses in Ohio will qualify for funding.

Oklahoma’s Response to COVID-19

On March 17, Governor Kevin Stitt urged Oklahomans to avoid eating in restaurants. He also discouraged discretionary travel and shopping trips. And he discouraged gatherings of more than ten people. But he initially did not declare any closings.

The Governor received a great deal of backlash for a tweet of him eating in a crowded restaurant with his family. After that, the Governor walked that back and declared a state of emergency.

As a result, Oklahoma small businesses are eligible to apply for emergency disaster loans from the SBA.

Oregon’s Response to COVID-19

Oregon encourages participation in its work share program. The goal is to minimize layoffs. The City of Portland provides support via Portland Community SOS.

Pennsylvania’s Response to COVID-19

What is Pennsylvania doing about COVID-19? On March 16, 2020, Governor Tom Wolf strongly urged non-essential businesses across the state to close for at least 14 days to help mitigate the spread of COVID-19.

The Keystone State’s main economic response is to direct businesses to the Pennsylvania Industrial Development Authority to get low-interest loans. Another suggestion was the Department of Community and Economic Development and their working capital loans could be of assistance to businesses impacted by COVID-19.

Rhode Island’s Response to COVID-19

The SBA announced it is offering low-interest federal disaster loans for working capital to Rhode Island small businesses suffering substantial economic injury as a result of COVID-19.

For businesses, municipalities, K-12 and other entities, Microsoft is providing six months of Office 365 tools for free to enable remote collaboration, file sharing and video conferencing. They’re also offering free assistance to set up these tools.

South Carolina’s Response to COVID-19

On March 13, Governor Henry McMaster declared a state of emergency. For restaurants, the Department of Health and Environmental Control will not be conducting routine inspections. But they will come and provide a non-graded evaluation and consultation upon request.

South Carolina small businesses are eligible for emergency disaster loans from the SBA.

South Dakota’s Response to COVID-19

Here’s what South Dakota is doing about COVID-19. On March 13, Governor Kristi Noem declared a state of emergency. The Governor is working with the SBA to obtain Economic Injury Disaster Loans for South Dakota businesses.

Tennessee’s Response to COVID-19

Here is what Tennessee is doing about COVID-19. On March 12, Governor Bill Lee declared a state of emergency. One part of the declaration is that it allows the construction of temporary health care structures in response to COVID-19. It also permits the waiver of certain regulations on childcare centers.

The Governor has applied for Tennessee to be eligible for emergency disaster loans from the SBA for small businesses.

Texas’s Response to COVID-19

On March 13, Governor Greg Abbott declared a state of emergency. Certain trucking regulations are being suspended to allow for the easier delivery of supplies.

The Governor has requested eligibility for emergency disaster loans for small businesses from the SBA.

Utah’s Response to COVID-19

This is how Utah is handling COVID-19. On March 6, Governor Gary Herbert declared a state of emergency. The Governor included the Salt Lake Chamber on the Utah Coronavirus Task Force to ensure the business community is considered throughout the current situation. Utah ski slopes closed due to COVID-19.

Utah small businesses are eligible for SBA emergency disaster loans. The city of Ogden has 0% loans of up to $10,000 available for small businesses. Furthermore, terms are 10 years with up to a 12 month deferral on payment.

Vermont’s Response to COVID-19

On or about March 11, Governor Phil Scott declared a state of emergency. The SBA will be able to provide Economic Injury Disaster Loans under a Governor’s Certification Disaster Declaration.

Also, the Agency of Commerce and Community Development is looking for data on impacts in the following areas:

Economic Injury
Supply Chain
Workforce (Including that caused by lack of childcare)
Business Travel
Visitor Travel and Tourism Activities; and
Remote Work Capabilities.

Contact a Vermont State Business Development Center for a disaster recovery guide.

Virginia’s Response to COVID-19

On March 12, Governor Ralph Northam declared a state of emergency. Regional workforce teams will be activated to support employers that slow or cease operations. Employers who do slow or cease operations will not be financially penalized for an increase in workers requesting unemployment benefits.

The Governor is authorizing rapid response funding, through the Workforce Innovation and Opportunity Act. This is for employers eligible to remain open during this emergency. Funds may be used to clean facilities and support emergency needs.

Washington DC’s Response to COVID-19

On March 17, Mayor Muriel Bowser announced that the SBA has accepted the District of Columbia’s declaration for assistance in the form of economic injury disaster loans following the advent of COVID-19. Furthermore, DC businesses can start applying now.

While the SBA directly administers this loan program, the Department of Small and Local Business Development, led by Director Kristi Whitfield, will work with the SBA on behalf of the District of Columbia.

Washington State’s Response to COVID-19 (with Recession Business Funding Opportunities)

By March 18, Governor Jay Inslee’s office had compiled a partial list of resources to support economic retention and recovery related to COVID-19 coronavirus.

The Washington State Department of Commerce’s Export Assistance Team division can help companies identify alternative markets. They can also provide firms with STEP Vouchers. These vouchers defray certain costs. These costs include those of trade show or trade mission fees, airfare, interpreter and translation services, business matchmaking, export training programs and more.

West Virginia’s Response to COVID-19

In West Virginia, Secretary of State offices throughout the state will not serve walk-in business and licensing customers. All these services can be completed online or by paper. For paper submission, packets and paperwork may be submitted in-person at a drop-off location or via the U.S. mail.

Per an application by Governor Jim Justice, West Virginia small businesses can apply for emergency disaster loans from the SBA.

Wisconsin’s Response to COVID-19

On March 12, Governor Tony Evers declared a state of emergency. The Governor worked with U.S. Sen. Tammy Baldwin to help secure federal funding to support efforts in responding to COVID-19 in Wisconsin.

On March 11, the Centers for Disease Control and Prevention announced that Wisconsin will be receiving more than $10.2 million to support response and prevention efforts.

Wyoming’s Response to COVID-19

What’s happening with Wyoming? On March 13, Governor Mark Gordon declared a state of emergency. Wyoming suggests small business owners apply with the SBA for low interest loans. They also suggest talking to bankers and other lenders for small business to see if short-term financial arrangements can be made. Entrepreneurs can talk to a Wyoming Small Business Development Center Network staff members. They can provide nontechnical advice and answer questions.

Other Relief and Recession Business Funding Opportunities

Some corporations and national charities are jumping in to offer relief to displaced workers, businesses, and other individuals. While some do not directly help businesses themselves, the argument can be made that helping employees definitely helps businesses. This type of help can also help employers keep their employees during these times.

Plus, more government financial aid to industries could be forthcoming. There will likely be even more help for small business owners in financial trouble.

USBG National Charity Foundation

For workers, some charities are jumping in. The USBG National Charity Foundation now offers a bartender emergency assistance program to help those who experiencing financial hardship in the industry. Those eligible can get help to pay bills and other expenses due to loss or decrease in income related to the coronavirus pandemic in the form of a grant.

To qualify for the grant, you must be a bartender, a child of a bartender, or be married to a bartender. You also have to show tangible proof of emergency.

Facebook Small Business Grants

Facebook recently announced their coronavirus relief effort for small businesses. $100,000,000 in cash grants and ad credits will be awarded to up to 30,000 small businesses that are eligible in over 30 countries Facebook operates. They promise share more details as they become available.

GrantWatch.com

GrantWatch has a page dedicated to government grant money available for coronavirus relief.

Recession Business Funding Opportunities: Other SBA Loans and Programs

While the emergency measures being taken by the Federal government to ensure access to SBA disaster loans are helpful, the other SBA programs and resources are still open and available. Don’t discount or discredit their helpfulness.

7(a) Loans

This is the Small Business Administration’s flagship loan program. It offers federally funded term loans up to $5 million. The funds can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds. It’s a great form of lending for small businesses.

The minimum credit score to qualify is 680. There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will suffice.

This is by far the most popular loan program the SBA offers. Funds are available for a broad range of projects, from working capital to refinancing debt. And it even includes buying a new business or real estate.

504 Loans

These SBA business loans are also available up to $5 million. Funds can pay for machinery, facilities, or land. Generally, they are for expansion. Private sector lenders or nonprofits process and disburse the funds. They work especially well for commercial real estate purchases.

Terms for 504 Loans range from 10 to 20 years. Funding can take from 30 to 90 days. They require a minimum credit score of 680. The asset that is being financed must be used as collateral. Furthermore, there is a down payment requirement of 10%. This can increase to 15% for a new business.

Also, to qualify, you be in business at least 2 years, or management must have equivalent experience if the business is a startup. Still, it’s a good form of lending for small business.

Microloans

Microloans of up to $50,000 are available through this program. Basically, they work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries. Unlike other SBA programs, financing for these loans is directly from the Small Business Administration.

Interest rates on these loans are 7.75% to 8% above the lender’s cost to fund. In addition, terms go up to 6 years.[AF2] Microloans can take upwards of 90 days to fund. The minimum credit score is 640. In addition, collateral and down payment requirements vary by the small business lending source.

SBA CAPLine

There are 4 distinct CAPLine programs that differ mostly in the expenses they can fund. Each of them carries a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. Funding can take 45 to 90 days.

CAPLine American Business Lending Programs

The four different programs are:

Seasonal CAPLines -Financing for businesses preparing for a seasonal increase in sales.

Contract CAPLines -Financing for businesses that need funding to fill a contract.

Builder’s CAPLines -Financing for businesses taking on a real estate or construction project.

Working capital CAPLines -Financing for businesses that are struggling with a short-term slump in sales.

Credit score must be at least 680 to qualify. There is no minimum time in business requirement. That is, unless you are getting a seasonal CAPLine. That one carries a one-year business requirement.

SBA Community Advantage Loans

This program is a pilot set to either expire or extend in 2020. Its purpose is to promote economic growth in underserved areas and markets. Credit decision makers overlook factors such as poor credit or low revenue if the business has the potential to stimulate the economy or create jobs in underserved areas.

Loan amounts range from $50,000 to $250,000 with a maximum interest rate of 11%. Terms range up to 25 years. It’s a great form of USA business lending for underserved areas.

Other Programs

In addition to these loan programs, the SBA offers additional programs and resources for certain groups. Examples include:

Veterans Advantage- General-use business loans with no guarantee fee for majority veteran-owned small businesses.

International Trade- General-use financing for businesses actively involved in international trade or hurt by competition from imports.

Export Working Capital Program- Short-term working capital for exporters backed by invoices or other business assets.

Recession Business Funding Opportunities: Non-Traditional Lenders

If you are a traditional type person, now may be the time to start thinking outside of the box. Private, non-traditional lenders are going to keep lending for a bit after the traditional lenders tighten up the spigot. The nature of their business allows them to keep the funds flowing a little longer and a little more freely.

Usually, the interest rates with these lenders are higher than those of banks and credit unions. But their approval requirements are easier to meet. And due to the rate cut by the Fed, interest rates should still be lower than they were before the crisis. Here are a few of our favorites.

OnDeck

Apply online with OnDeck and get a decision as soon as processing is over. Loan funds will go to the bank account you select. Financing can be fast. Entrepreneurs can use such a loan to establish their company’s credit history by making prompt payments. Thankfully, they offer fixed rates. Amounts from $5,000- $500,000 are available.

With OnDeck, you will need to have a 600 or better personal credit score for a minimum of one owner. There is also a 3 or more years in business requirement. In addition, $250,000 or better gross yearly earnings is necessary. You cannot have a bankruptcy in the last 2 years. Unresolved liens and judgements are also deal breakers.

StreetShares

StreetShares is a loan provider offering term loans, credit lines, and specialized veteran company bonds. Also, small business loans and investing alternatives are available. Most recently, they offer contract financing. This is similar to invoice factoring. Pre-Approval takes just a few minutes. It does not hurt individual credit. Loans are available ranging from $2,000- 100,000.

You need to have one year or more in business and $25,000 or better in yearly income. Often, StreetShares will make exceptions for high-earning businesses at least 6 months old. Still, you need to have a 620 or better individual credit rating, be a United States citizen, and have reasonable credit. If you do not have reasonable credit, you will need a guarantor that does.

LoanBuilder

LoanBuilder is a service of PayPal. It concentrates on short-term lending to midsize businesses. They provide term loans. You might have the ability to get a loan by the next business day. They have customizable loans without an origination fee.

Loans range from $ 5,000- $500,000. Requirements include a 550 or better personal credit score, $42,000 or more in annual profits, and 9 months or more in business.

BlueVine

Get quick money with BlueVine. They offer invoice factoring as well as lines of credit. BlueVine can process financing in just a day. Loan amounts from $5,000 to 100,000 are available. Lines of credit are not available in all states. Like others, requirements are 6 or more months in business as well as $100,000 or more in yearly income. Plus, you need to have a 600 or better personal credit rating.

Credibly

Credibly is a direct loan provider that specializes in unsecured business funding. It can take just a day or two from application approval to financing. Funding can be used for overhead or day-to-day operations. Loans are available from $5,000- $250,000. Your personal credit does not need to be super-high.

Credibly requires a 500 or better individual credit score. In addition, 6 or more months in service and $15,000 or higher in average monthly deposits are required. Furthermore, you must have at least $10,000 in monthly deposits.

Fundbox

If you start with a search for an online lender, Fundbox is going to be one of the first to pop up. It is a line of credit rather than a loan, but it is a great funding option because there is no minimum credit score requirement.

They offer an automated process that is super-fast. Repayments are automatic, meaning they draft them electronically. They occur on a weekly basis. Remember, you could have a repayment as high as 5 to 7% of the amount you have drawn currently. That is because the repayment period is comparatively short. This means you need to be sure you have enough funds in whatever account you connect them to so that it can cover your payment each week.

Loan amounts come as low as $100 and as high as up to $100,000. The max initial draw is $50,000. Though there is no minimum credit score requirement, they do require at least 3 months in business, $50,000 or more in annual revenue, and a business checking account with a minimum balance of $500.

Upstart

Upstart is an online lender that uses a completely innovative platform for loans. The company itself questions the ability of financial information and FICO on their own to truly determine the risk of lending to a specific borrower. They choose to use a combination of artificial intelligence (AI) and machine learning to gather alternative data instead. They then use this data to help them make credit decisions.

This alternative data can include such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances. The software they use learns and improves on its own. You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities. Typically, business loans are available ranging from $1,000 to $50,000. Interest rates vary greatly, ranging from 7.5% to 35.99%. Repayment terms can be either 3 -year or 5-year.

To be eligible for a loan with Upstart, you must meet the following qualifications:

Credit score of 620+
No bankruptcies or negative public records
No delinquent accounts
Meet debt to income standards (they only note they will check this ratio, not what their standards are.)
Have fewer than 6 inquiries in the past 6 months on your credit report, not including those related to student loans, vehicle loans, or mortgages

These are the requirements they list on their website. One independent review said that the requirement for the debt to income ratio is a maximum of 45%. It also says that the minimum annual income has to be at least $12,000. For more information visit our Upstart review.

Fora Financial

Founded in 2008 by college roommates, online lender Fora Financial now funds more than $1.3 million in working capital around the United States. There is no minimum credit score, and there is an early repayment discount if you qualify.

The minimum loan amount is $5,000 and the maximum is $500,000. The business must be at least 6 months in operation and the monthly revenue has to be $12,000 or more. There can be no open bankruptcies.

Bond Street

Offering term loans of $10,000 to $1 million, Bond Street terms are for up to 1 to 3 years. Bond Street will ask for both EIN and SSN.

The offer arrives within 3 days. Bond Street will only do a soft credit pull, and 640 or better credit score is likely to get you a loan. But Bond Street will look at other factors too. For example, they require 2 years in business and annual revenue of at least $200,000.

Like others, rates start at 6% and go up to 22%. APR works out to be 8 to 25%. Also, there is a 3 to 5 % origination fee.

Advantages are the soft credit pull and the fact that they will look at factors other than your personal credit if your FICO score is low. Another benefit is that Bond Street can offer very large loans if you qualify. Disadvantages are the longer time in business requirement and high APR.

Lending Club

Popular online lender Lending Club offers term loans. Similarly, business loans from $5,000 to $300,000 with from 1 to 5 years are available.

Quotes are ready in 5 minutes are less. Thankfully, funds are available in as little as 48 hours if approved. Furthermore, there are no prepayment penalties.

For these loans, annual Revenue must be $75,000 or more. In addition, you must be in business for 2 years or more. Personal FICO score of 620 or better is required. Interest Rates are regularly 5.99% to 29.99%. Total annualized rates starting at 8%.

Fortunately, annual revenue requirements are not too high. Another good thing is funds are available quickly. Unfortunately, rates can get high, but the Fed rate cut helps with that some.

Quarter Spot

Quarter Spot is an online lender that offers short term loans. Amounts ranging from $5,000 to $150,000 are available. The terms are 9 to 18 months. Like others, Quarter Spot will only do a soft credit check when you apply. To qualify, your company must have annual revenue of $200,000 or more. Also, you have to have a personal FICO Score of 550 or better. There is no fee to apply.

The minimum time in business is 12 months. Surprising to some, you must have a minimum average bank balance of $20,000. In addition, they require a minimum of $16,000 in monthly sales.

The borrower must own at least 50% of the business. Their rates are 25% to 40%.

Advantages are that the personal FICO score requirement is relatively low. Minimum average bank balance requirement is also fairly low. Disadvantages are that maximum rates are rather high.

Rapid Advance

Rapid Advance offers standard, select, and preferred loans. For standard loans, $5,000 to $1 million is available. Their terms are 4 to 12 months. Your company must have annual revenue of $120,000 or more. Also, you must have a personal FICO Score of 580 or better. The minimum time in business is 2 years.

For select loans, $15,000 to $1 million is available. Their terms are 6 to 15 months. You must have annual revenue of $240,000 or more and a personal FICO Score of 620 or better. The minimum time in business is 3 years. 1.12 to 1.31 factor rate.

For preferred loans with Rapid Advance, $15,000 to $200,000 is available. Their terms are 9 to 18 months. You must have annual revenue of $240,000 or more. For these, you must have a personal FICO Score of 660 or better.

The minimum time in business is 6 years. A minimum bank balance of $10,000 or more is also required. Consequently, borrowers must have at least 10 deposits from 5 different sources every month. There is a 1.11 to 1.25 factor rate.

The advantages with these loans are many. First, there are a few choices for loan types. Also, the maximum available amounts are high. In contrast, disadvantages include high minimum bank balance requirements and high annual revenue requirements.

Kiva

Kiva is an online lender that is a little different. For example, the interest rate is 0%. This means, even though you must pay it back it is absolutely free money. They don’t even check your credit. But there is one catch. You must get at least 5 family members or friends to throw some money in the pot as well. In addition, you have to pitch in a $25 loan to another business on the platform.

Accion

If your personal credit is okay, Accion may be a good fit. This is a microlender. They are a nonprofit, that offers installment loans to both startups and already existing businesses. The minimum credit score is 575. Sometimes, they will go as low as 500. You don’t have to already be in business. But if you are not, you must have less than $500 in past due debt. In addition, your business needs to be home or incubator based. This makes it perfect for those looking to start a new business from home while social distancing. It is also a great option for adapting an existing business to a home format.

Loans are from 6 to 60 months and interest rates range from 7% to 34%. A personal guarantee, and sometimes specific collateral, is necessary in most circumstances.

Why Choose a Private Lender During this time?

It is very possible you are reading this thinking to yourself, why would I choose over one of the already mentioned recession business funding opportunities? The truth is, in our current situation, you wouldn’t. Exhaust every available option for coronavirus relief first. SBA loans, rural small business grants, and anything else you can find, apply for it now. But what if that isn’t enough? Honestly, it is often easier to get funding from an online lender. This is especially true if your personal credit score is not up to par.

Most term loans and many lines of credit require a personal credit check. That is even if you have great business credit. With the U.S. and even the world economy spiraling into a crash for the ages, credit scores are bound to follow. Some lenders may take your business credit into account. Still, if your personal credit stinks, it won’t help you much. Private lenders tend to have lower minimum personal credit score requirements than traditional lenders.

Next, an online lender will typically send you the funds faster. That is a huge asset right now. Sometimes you can have the money in as little as a few days, with approval coming in as little as 24 hours. For sure, time is of the essence right now.

An Online Lender Could be the Answer for Recession Business Funding Opportunities

If you can go with a traditional lender, great. They often have better rates and terms. But like many business owners, you may not have that option. In that case, an online or private lender may be the perfect solution. They will have recession business funding opportunities. Approval requirements allow many more borrowers to get their funds quickly and easily. This is especially important in times of crisis like this. Even beyond COVID-19, the recession is sure to continue for a while. You need a plan, and private, online lenders could be a big part of that plan. Business to business lending could even be a good choice.

Understandably, the process of finding the best online lender for your business can be overwhelming. There is no need to stress more than you probably already are. We can help you find the right lender, and even walk you through the entire application process. We want to make it as easy as possible for you to get recession funding.

Consider Online Business Lending

You need to find the right one for you though. Consider the following factors:

How much do you need?
What do you need the funds for?
What is your credit score?
How much of a payment can your budget handle?

It’s also important to note, there are a lot of predatory lenders online. You must be careful. The list above is a great starting point, but don’t stop there. There are a lot of options, so take the time necessary to do your research. If a type of small business lending seems too good to be true, then it probably is.

Recession Business Funding Opportunities: Be Fundable Despite What Changes May Come

Of course, nothing is the same today as it was even a couple of days ago. Requirements necessary to gain access to funds will likely change and continue changing. Not only will federal requirements to access SBA loans change, but states are adding relief programs daily. Be sure to check back as our list of state programs will be updated.

For now, the basic elements of fundability will not change. Ensuring your business is as fundable as possible, and protecting your fundability even now, will only increase the ability of your business to get the USA loans funding it needs to survive during hard economic times.

Make Sure Your Business Is Set Up to Access Recession Business Funding Opportunities

Now is a good time to review how your business is set up. It needs a foundation of fundability. Basically, that is setting your business up in a way that it appears to be a fundable entity separate from you as the owner. It may seem that now is the worst time to be doing this. But if your business is currently shut down due to the coronavirus, you not only need to focus not only on how to stay in business. You also need to know how to get the most funding you possibly can when things start to go back to normal. Building fundability helps even for a guaranteed business loan.

While keeping credit in order is vital, the truth is it may be hard to do right now. Access what small business funding you can. But research options for funding for small business that will work even if your credit isn’t great. In addition, beyond credit, you can control other things that affect your ability to get funding, to a point. This will offset some of the potential reduction in credit score.

You Need Dedicated Contact Information

For example, you cannot share a phone number and address with your business. A business must have a dedicated business phone number and address.

How do you do that? First, you can get a separate phone line and have a separate business location. This is pretty standard. But it can cause issues if you run your business online out of your home.

Virtual Offices for Recession Businesses

In this case, you can get a virtual office address and a VoIP (Voice over Internet Protocol) business phone number. Basically, it allows you to speak on the phone via the internet instead of phone lines. A virtual address service will often offer other services as well. These may include live receptionists and meeting space. VoIP phone numbers can typically be forwarded to any number you want. As a result, you do not have to get a dedicated line to have a dedicated number.

Why does your business contact information need to be separate from your own? There are a number of reasons. But for fundability, there are only two. First, it makes your business seem more professional. In a lender’s eyes, this lends itself to appearing more fundable.

Next, it creates the separation needed between business and owner. This can ensure the business can build credit separate from the owner’s personal credit. While this isn’t the only step necessary for separation, it is a necessary step.

You Need an EIN for Many Recession Business Funding Opportunities

Another thing to consider is whether your business has an EIN. A lot of business owners, especially those running their business as a sole proprietorship have an issue. They tend to use their social security number on business documents. But an EIN is a much better option.

It not only further separates the business from the owner and appears more professional. In addition, it helps ensure that business credit accounts stay off your personal credit report.

You can get an EIN for free from the IRS. The process is fast and easy. It will make it easier to get government small business loans.

You have to Incorporate

There are several reasons for this. First, incorporating creates separation from the owner. This is necessary for building business credit and appearing fundable to lenders. It also helps protect your personal assets should the business struggle. There are tax benefits as well. Your options for incorporation include an S-corp, an LLC, or a corporation.

The one that you choose doesn’t matter much for fundability. Make that choice based on the level of liability protection you need and you budget. It’s best to talk to a tax professional or attorney when making the decision.

A Separate Business Bank Account is Essential for Traditional and Recession Business Funding Opportunities

You need a separate, dedicated business bank account. It helps create the separation necessary to build business credit, which is a huge piece of being fundable. But some of the recession business funding opportunities available during this time may also require a separate business bank account.

Be Consistent

This part of fundability can get complicated because it has so many interconnecting pieces. In fact, the consistency part can be especially daunting. This is because it goes all the way back to the start of your business. If it has been in operation for a while, you can see how that could be an issue.

The thing is, most business financing applications are denied due to fraud concerns. In truth, this can be an issue for you if you have different information across various records. All names, contact information, etc. needs to be consistent. This is when it comes to public records, accounts, websites, social media, and licenses.

Website

This is a great time to leverage your company website. First, you must have one. Yet, it can’t just be something you throw together. It needs to be professionally designed. In addition, you need to pay for hosting. With consumers trying to stay in due to social distancing, online trading is exploding. If your website isn’t up to par, you are going to miss out big time.

Also, your business email address needs to have the same URL as your website also. Truly, you shouldn’t use a free email service such as Yahoo or Gmail.

Do You Have Business Credit? If So, What’s It’s Like?

If you don’t have business credit, consider beginning to work on it if possible. You do have business credit? Now is not the time to let it slip. Now, take advantage of the recession business funding opportunities available to help you.

Do You Have a D-U-N-S Number?

Dun & Bradstreet is the largest and most commonly used business credit reporting agency. Likewise, each business in their database has a D-U-N-S number. If you do not have one, they will not recognize you. As a result, any accounts reporting will be discarded. You must have this number.

Other Agencies

Other agencies can affect your fundability as well. For example, there are two other main business credit reporting agencies. They are Experian and Equifax. Honestly, your record with these and other agencies can affect your ability to get funding also.

Other credit agencies exist, and some lenders do use them. CreditSafe and FICO SBSS are just a couple of examples. In addition, your file with LexisNexis and The Small Business Finance Exchange can affect your business credit score. Of course, that affects fundability too.

Monitor Your Business Credit

Monitoring is especially important during hard economic times. First, you need to stay on top of which accounts are being reported and what they are reporting. You don’t want anything to slip. Next, if it does start to slip, you need to know so you can take action.

If you find mistakes, you can contact the reporting agency in writing and have them corrected. Remember, send copies of backup documentation, not originals.

Keep Up with Financials

Honestly, this is more important now than ever before. Currently, some banks are even reviewing weekly financial information instead of monthly or quarterly. This way, they can see if income is starting to slide due to the COVID- 19 pandemic. It makes sense for small business lenders to work this way.

If you are a very small business, you may not give much thought to your financial statements. But it’s essential to do so, even now. You want to give yourself every opportunity to get US business lending.

Pay Your Bills, Both Business and Personal

Try hard to stay on top of bills during this time. Take advantage of all of the programs and resources, both state and federal, to help you do so. This is essential to maintaining healthy business and personal credit. Also, both of these are vital to fundability.

The Application Process

For this period of time, the main thing to remember here is to only apply for the loan for small business from government programs you qualify to take advantage of. Also, be prepared. You have to act fast. Yet, if you enter the federal small business loan process without everything you need, it will only slow things down. Take the time to read the requirements and gather what you need to first.

Want to review your options with one of our consultants? Give us a call at 877-600-2487.

Starting a Business?

Now could be the perfect time to start recession proof small businesses. There are businesses that do well in recession, so do your homework. But remember, the best recession proof businesses are the ones which help people. If you want us to show you the best way to start and run a business even during a recession then check out our Startup Accelerator Course.

Check Out Recession Business Funding Opportunities During the COVID-19 Pandemic and Help You Protect Your Fundability

Of course, you’re thinking now is not the time to be building anything. You need to stay afloat. If you are not already fundable you can’t worry about that right now. Here’s the thing though…you can. First, get what United States government small business loans are available quickly. Then, take a second, breath, and consider the fundability of your business.

Honestly, there is no time like the present to get an EIN, separate your contact information, and even incorporate. While you do these things, you will be setting yourself up to building fundability and business credit. And you will be ready even during these hard times. That in turn, can only increase your access to funds over the long-term.

Basically, it is a matter of protecting what you have and growing what you can right now. Truly, it is a great time to borrow. The Fed’s rate cut should lead to lower interest rates than we have seen in years. In addition, many state and federal governments are working to make borrowing more accessible to businesses. This is to both help them stay afloat and to shore up the impending economic decline.

Start here to find what’s available to you both federally and in your state. And we’ll update often. So, if your state isn’t doing anything right now, come back every day to see if things have changed. The key to surviving is to take advantage of the recession business funding opportunities available to your business today. Time is short. Funds are limited. You must act now. Don’t wait.

The post Ride the Rapids: Your Essential Guide to Accessing Unique Recession Business Funding Opportunities Related to Coronavirus appeared first on Credit Suite.