How to increase your chances of getting a business loan

By Michael Cornnell

LENDING WITHIN THE INDUSTRY

Credit and lending within in the industry is also an option. In fact, many companies position lending as a meaningful part of their business. Ross Silverstein, president and CEO of Wayland, Massachusetts-based distributor iPROMOTEu, described a new lending service the company is offering, called “iPROMOTEu Express.”

HOW IT WORKS:

“Industry distributors who need financing for individual orders in excess of $10,000 can contact iPROMOTEu Express for assistance. iPROMOTEu Express will finance the order with the vendor and will track the production of the order to ensure that everything is proceeding according to schedule. iPROMOTEu Express will also invoice the customer and collect payment. Upon receipt of payment from the customer, iPROMOTEu Express will forward the proceeds to the distributor after deducting the costs associated with the order and a 12 percent fee. Distributors requesting financing must provide information online to iPROMOTEu Express regarding the order for its review. In most instances, iPROMOTEu Express will respond to a distributor’s request before the end of the next business day.”

WHAT MAKES IT DIFFERENT FROM GETTING A LOAN AT A CREDIT UNION OR BANK:

“In many instances and for a variety of reasons, a distributor may not be an acceptable candidate for a commercial or personal loan from a financial institution. Moreover, obtaining a loan from a financial institution is usually time-consuming and expensive. Of course, the financial institution doesn’t have any industry experience and won’t be in a position to follow up on the order and address issues that may arise. iPROMOTEu has terrific working relationships with industry suppliers to help ensure that the order proceeds smoothly from start to finish.”

For more information on iPROMOTEu Express, visit www.ipromoteuexpress.com.

Business loans: Formerly the realm of credit cards, crossed fingers and bank collapses, thankfully it's once again possible to get credit from lenders other than ones called "MasterCard" or "My neighbor Bill who's been pretty good about saving his change in an old cookie jar shaped like his favorite childhood clown." The recession is winding down, banks are opening up, and businesses are growing again. Maybe now is the time to get a little extra capital to fund your own plans for expansion.

If you're not experienced getting them, however, securing a loan for your business can be a little daunting. Where do I go? Who do I ask? How can I make sure they say "yes"?

Ty Kiisel, director of content marketing for Lendio, a small business lending service, answers all those questions and more.

Print+Promo (P+P): What are three good things small-business owners should do to improve their chances of getting a loan, and why?

Ty Kiisel (TK): This is an easier question to ask than to answer, but I'll give it a shot:

1. Start by looking inward.

Most lenders (particularly banks) are going to look at your credit rating, your annual revenues, and any collateral you might have. Particularly for small-business owners, your personal credit rating, along with your business rating, are important. If that's what they're going to be looking at, it's what you should be looking at too. Although there are lenders who look at other criteria, you're credit score is No. 1. The lower your score, the more expensive (read: the higher the interest rate) the loan will be.

2. What am I going to use the extra money for?

Banks are pretty risk averse and don't like lending to small-business owners who can't demonstrate they have a plan and a projected outcome regarding how the funds will be used and how they will positively impact the business. A plan is more likely to get the small-business loan than no plan. So I guess the question should really be, "Am I able to effectively share the plan with a lender so they get as jazzed about what I'm going to do with the money as I am?"

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