Recently I had the opportunity to interview Scott Jordan, founder of All Credit Lending Solutions.
All Credit Lending Solutions was formed in 2005 to help small business owners in obtaining commercial financing from banks and other alternative lenders and can be found online at yourbusinessloannow.com.
Scott gave some nice tips on raising debt capital in today's environment. Click here to listen to the full interview, or listen to a preview below.
To begin, Scott mentioned that building your credit score is key to getting debt financing for your business.
As you may know, Dun & Bradstreet's Paydex is the primary source for business credit scores. Paydex scores can range from 0 to 100, and Scott said that a score of 70 or above is necessary for a business to get unsecured lines of credit.
With regards to startups, who don't have a business credit score, you ideally want to have a personal credit score above 680.
In either case, Scott stressed the importance of spending the time to manage and improve your personal and business credit scores.
For those folks who don't have great credit, Scott revealed two other things that will help in receiving debt financing. The first is having orders in hand from reputable customers, and the second is having assets which you own free and clear that you can use as collateral.
Another key point which Scott revealed is that entrepreneurs and business owners need to "think like a banker." Bankers, according to Scott, think "safety first." You need to show the banker multiple ways in which you can repay the debt; e.g., via revenues, liquidating assets you own, etc.
Scott also mentioned that your chances of receiving a loan multiply when 1) you are very clear on the reason why you need the loan, 2) put together a quality business plan, and 3) get all your financial documents in order for the bank's review.
Click here to listen to the full interview, or listen to a preview below.