News You Can Use - U.S. Credit Markets

sagetrout

I get a lot of questions from businesses, potential borrowers/lessees, and referral contacts about what’s going on in credit markets these days with all the news about the mortgage meltdown and credit markets.   What’s really going on?  Can you still get financing?

 

I can’t say that the commercial credit market has been completely unaffected by what’s happening in the mortgage markets.  It definitely has.  Lenders and leasing companies are tightening up credit standards after the blowup in mortgage markets.

 

Let’s put it this way.   What the mortgage lenders did to screw up the market will affect you to some extent for the time being.  You can get funding but the standards are higher.

 

Our funding relies on insurance companies, pension funds, hedge funds, and investor pools of money.  Money is moving away from CMO obligations but it still needs to be invested. This means that more money is available but the lending sources are looking for stronger assurances of repayment.  

 

More specifically, here’s what I can tell you. 

 

SBA Startup Loans – currently SBA Startup loans require a 25% non-borrowed cash injection from the borrower.   There are hints this requirement will be raised to 30%.   If you were thinking about getting an SBA loan and your funds are limited, apply now before they raise the bar.

 

Lines of credit – these are becoming more difficult to obtain.   You need a strong balance sheet, some good operating results, and customers who can pay on time.   High FICO scores definitely help.  Businesses connected with real estate and construction will have a very difficult time obtaining financing and may have to consider alternative methods of financing such as factoring invoices.

 

Lease financing – lease financing is still the best option for companies that need more equipment and software.  Startup companies can get financed to some extent.   Rates however may go higher and credit standards will be higher.  

 

If you have questions or would like more information about financing options, please contact me directly.   There is more money available but the going is going to be tougher until this market sorts itself out.   My best guess is one to two years before it’s over. 


 

jamesr06

I have a small business where i am trying to get working capital,my middle credit score is a 688 and all credit cards is in good standings,i have 2 late payments on a vehical that i finance for some one else,the late payments are over 1yr old, what can i do in this situation to get a line of credit for $50,000

Roblue

I believe there is a glimmer of hope in one aspect.  There are signs of the emergence of unconventional lending strategies and institution that are beginning to cater to individuals with not so ideal business prerequisites.
You are absolutely correct in your post.  Currently, the conventional lending market is making it more difficult to acquire these types of loans.  That`s why I ended up finding an unconventional one.
I call it unconventional because I couldn`t get any of the common financial venues convinced that I was worth the risk.
However, www.thesnaploan.com gave me an opportunity.  They are straight forward and cater to the not so ideal.
They may be worth a shot.

sagetrout

James,
 
Lines of credit are the most difficult type of financing for most businesses to obtain.  Generally speaking you need to be in business at least two years to qualify.   Your credit score is good at 688.   If you`ve been in business at least two years and you have assets that could secure it such as receivables then I`d be happy to talk to you about a credit line. 
 
The other option is a unsecured line of credit.   You need at least a 675 FICO to qualify.   We will begin offering unsecured lines in January.   Please contact me for more details.
 
 

jamesr06

Doug i will be very interested in hearing more about the unsecured lines of credit coming in January. I do not have any assets,could i possibly qualify for a business credit card.My business is over 2yrs. old.

Roblue

I get a lot of questions from businesses, potential borrowers/lessees, and referral contacts about what’s going on in credit markets these days with all the news about the mortgage meltdown and credit markets.   What’s really going on?  Can you still get financing? I can’t say that the commercial credit market has been completely unaffected by what’s happening in the mortgage markets.  It definitely has.  Lenders and leasing companies are tightening up credit standards after the blowup in mortgage markets. Let’s put it this way.   What the mortgage lenders did to screw up the market will affect you to some extent for the time being.  You can get funding but the standards are higher. Our funding relies on insurance companies, pension funds, hedge funds, and investor pools of money.  Money is moving away from CMO obligations but it still needs to be invested. This means that more money is available but the lending sources are looking for stronger assurances of repayment.    More specifically, here’s what I can tell you.   SBA Startup Loans – currently SBA Startup loans require a 25% non-borrowed cash injection from the borrower.   There are hints this requirement will be raised to 30%.   If you were thinking about getting an SBA loan and your funds are limited, apply now before they raise the bar. Lines of credit – these are becoming more difficult to obtain.   You need a strong balance sheet, some good operating results, and customers who can pay on time.   High FICO scores definitely help.  Businesses connected with real estate and construction will have a very difficult time obtaining financing and may have to consider alternative methods of financing such as factoring invoices.  Lease financing – lease financing is still the best option for companies that need more equipment and software.  Startup companies can get financed to some extent.   Rates however may go higher and credit standards will be higher.    If you have questions or would like more information about financing options, please contact me directly.   There is more money available but the going is going to be tougher until this market sorts itself out.   My best guess is one to two years before it’s over.   

Perhaps, as new and emerging business owners, we need to start approach non-conventional venues for our businesses.
Take a walk of the off-beaten path.  There are resources out there.  However, they are swarmed by scams and the like.  It is very difficult to sift through the sludge to find a legitimate source.
It is easier to go through referrals.  This is how I found my source off the beaten path.  I found success with www.thesnaploan.com.
They did not require collateral and you only pay interest on the funds burrowed.  What`s more is there is no fee if they are unable to acquire a loan for you.
It`s pretty straightforward and can all be done online.  They have a decent turn around time too.
See if they work for you.