SBACash Bonus Report:
How Your Credit & Your Collateral
Don't Necessarily Matter
in Getting A Loan!

What if I DO have good credit/collateral?

You've never heard this if you've talked to a banker, of course! And most investors won't tell you this. Either will most business people.

So, how can it be true then? If you have bad credit, or you don't have much collateral, or any, then how do you stand a chance of getting a loan, and opening the business you want?

First, let's understand why nobody (except us!) is going to tell you this- because no banker wants someone with bad credit, if they have a choice! Obviously, it is safer for them to only loan their money to people who have tons of their own money, so if that person runs into trouble the bank can be pretty sure of still being able to collect on the loan.

So, if you just wander into a bank, and tell them you heard they offer SBA loans and that you would like one to buy a great business you found or want to start, but, by the way, you have no money and no assets, they are going to be quick to show you the door. Banks hate risk, and anyone with no money of their own looks very risky to a bank.

So, the secret here is to remove the perception of risk for the bank. How you do this depends entirely on what kind of loan you are seeking- to start a business of your own or to acquire an existing business.

In either circumstance, the first thing you have to have is a solid business plan and very solid financial plans that demonstrate that you know exactly how to run the business, how much money it will bring in, how much it will cost to run, and that there will be plenty of money every month to pay off the money the bank loans you- and with plenty of margin for error.

The ability to demonstrate to the loan officer that you know what you are talking about, down to the tiniest detail, and that you have thought through all the possible things that will have to be done, the things that can go wrong, and the things that you will do to be successful is key to your ability to convince them to fund you.

Bring everything you can to the meeting to enhance your credibility, and certainly make sure you have spent a good deal of time in the lead up getting these things prepared. What kinds of things are we talking about? How about these:

• A list of clients or customers ready to do business with you the minute you open

• A list of suppliers you've already talked to anxious to do business with you (maybe who already know you from previous work?)

• A complete marketing plan with sample brochures, business cards, advertisements, etc. for display

• Quotes from contractors for any work that needs to be done

• Quotes for any furniture or equipment that must be bought

• Have an advisory board of experts in the field, including ones that are known in your industry locally, regionally or even nationally, who you have talked to and will vouch for your ability to make it happen

• Anything else you can think of that will make the banker see you as already mostly there instead of just a wishful thinker

Now, if you are buying a business, you should be able to work out a deal where the owner will take back part of the purchase price as a loan to him, and subordinate to the bank. This means the bank has a secure first position, and will feel more comfortable making the loan. It also means that with this type of arrangement and an excellent presentation of your ability to run the business you may be able to get the bank to overlook your own personal credit or collateral situation.

Or, if not, you will at least have a much easier time finding a partner to put in the last amount, or a co-signer who will vouch for your share. After all, their risk is fairly small, and the reward you can make as lucrative as necessary to ensure their participation. And this way, you've gotten a full business, already up and running and producing cash, that you otherwise never could have gotten.

If you want to open a business from scratch, then you may also need a partner to help come up with the difference between the loan value and the amount needed to launch. But there are many other creative ways to do this as well. You could partner with another business that is complimentary but not competing, and they could put up the amount needed to cover the difference. Or, you can pre-sell the services you are offering, and use the purchase contracts as collateral for the money you are short.

Bottom line is, loans can and are made to people with bad credit and no collateral. All you must do is have a good presentation on how you have reduced the banks risk to an absolute minimum, and use some creative thinking on how to secure the small amount of money needed to complete the deal.

So, are you ready to get your loan?

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If you do have good credit, and you do have some collateral, then there is really NO reason you can't get the loan you want. Again, it just comes down to making a convincing case to the bank with the right plan, the right numbers, and the right supporting information, and virtually anyone can do it- we guarantee it!