Updated: Jan 26, 2022
Many small business owners have tried to garner working capital loans or lines of credit from their local bank and have been denied for any variety of reasons.
Is your business less than three years old?
Is your income less than $5000 per month?
Is your personal FICO score below 629?
Is there derogatory information in your business credit report?
Don’t lose faith! We know from experience, small business owners can get working capital, even if they fall into all four of the categories above.
There are a variety of lending resources who offer working capital loans to small business owners, and each of them will have their own pre-qualification criteria. While your company may not qualify for a million dollar bank line of credit yet, you could very well qualify for a low dollar working capital loan to help get your foot in the door.
My own business was barely a year old when it was approved for a working capital loan. Our annual income was half what most lenders were looking for, and with everything we had spent to start our business, personal credit scores were below 600. We were more focused on what we could get for our clients than for ourselves.
I wasn't even looking for funding at the time…
Sure, we had worked to put our corporate credit file into the right position, but we were convinced our tiny business was not making nearly enough to qualify for a working capital loan. When we were approached with an offer totaling half of our prior year’s income, and repayment terms that could easily fit into our budget, we suddenly found ourselves rethinking our options.
We decided to take just a quarter of the offered amount and, ten minutes later, the funds were in our bank account and we were outlining a new strategy to boost our advertising. A year later, as we approach our payoff date, we could not be any happier, especially when we consider how many more small business owners have been reached.
LESSON: Don't downplay your potential based upon what others may or may not be qualifying for. Your business is an independent entity with its own specific set of circumstances. You never know what you can qualify for until you give it a try, but be sure you have put your company into a position to succeed before those first applications go out.