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SmallBizChat Recap: Where to Go When the Bank Says No

SmallBizChat Recap: Where to Go When the Bank Says No

It’s Thursday so it's time for another SmallBizChat recap, a weekly Twitter chat where small business owners can get answers to their questions.

Last night’s topic was Where to go When the Bank Says No! with guest of honor Karlene Robinson with hosts Melinda Emerson and Amanda Littlejohn.

Check out previous recaps of Twitter chats too!

As usual, I’ll be pulling favorite questions and tweet answers from the guest as well as chat participants.

Q1: How do you finance a business in a tough economy?

Karlene continues: Use what you have to finance your business by showing lenders logical ways as to why you need their money. Look at issues affecting your biz & implement changes or add solutions that help you gain access to capital. Don’t get stuck on one way of financing your business or on the amount you figure you need. Lenders & investors are looking for logical business ideas to finance; stop worrying about them stealing your ideas.

Q2: How do you define the right financing solution for your business?

Karlene continues: The right financing solution should be a good fit for you and the lender.Make it a WIN-WIN situation. Lenders provide ‘Niche’ financing.If they do not think your business is a good fit, look elsewhere. Financing is a people business. Lenders should want to do business with you. Don’t try to fit a square peg in a round hole. The same goes when seeking a financing solution.

Epiphany continues: Presentation matters. Only get 1x to make a first impression. Make sure it LOOKS (on paper) as amazing as you believe it is.

Q3: What are some key factors stopping the flow of money to business owners?

Karlene continues: Negative cash flow affects borrowing power. Lenders want to know how you will repay them. Your debt-to-income ratio is a major drawback if you have more debt than income. Industry type and issues affecting it will present its share of access to capital issues. Your commitment to the business will affect your financing opportunities. Not addressing negative internal factors affecting the business; i.e. employee issues or year-year decline.

Q4: What can business owners do to help boost their financing success?

Karlene continues: Show you know your business inside out. Be able to verbally demonstrate that knowledge. Make sure you know why you need to borrow ‘Other People’s Money’ OPM. Provide all applicable documentation per lender’s request. Be willing to make appropriate changes if this will make the deal work in for you.Present solid financials or projections that were not just pulled out of ‘thin air’.

Q5: What is alternative business financing?

Karlene continues: These sources are individuals, business owners, investors who prefer to invest their money in this market. Think of them as non-FDIC governed lenders. Remember, banks have more stringent guidelines. Alternative lenders do not rely on a board or committee to make lending/investing decisions. Alternative Business Financing fills the gap that banks cannot finance or will not touch. It is the driving force behind the success of many brand name companies you know today.

Continue reading part 2 of Where to Go When the Bank Says No curated by

Photo credit: Profound Whatever via photopin cc


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