This week I'm sharing some insider tips for business owners seeking optimal funding terms from the Alternative lending industry.
The best way to start is to learn how your business profile is viewed by the lending community and that starts with industry / location, revenues and credit profile. Most business owners already have a realistic understanding of what they qualify or don't qualify for since they are the ones most frequently seeking financing for a variety of expenses. Knowing ahead of time which lenders are most compatible with your businesses profile is the key to securing optimal funding in a timely fashion.
That job is best accomplished by honest brokers who have experience funding a wide range of profiles from different locations and who will know from recent experience which requests match up best with specific lenders. This maximizes the chances of success in most cases and helps the business owners understand the terrain from a knowledgeable guide.
It's most helpful and efficient to let the broker know all details like outstanding balances from other lenders for example. When these issues show up in review it delays the process and sends the file into review-purgatory until questions are answered. Lenders work in an assembly-line manner so getting pulled and then re-submitted hurts chances of approval.
It may seem logical that seeking bids from multiple brokers would increase the chances of a competitive offer but not always. In Fact, sometimes it works against your interests. Business owners might not be aware that most applications end up in two central hubs for credit scrubbing, I've heard of the same application showing up as many as 5 times from different broker shops simultaneously seeking an offer. That looks desperate and isn't helpful because all the lenders are guarded when they see the same file multiple times. It also keeps credit from being pinged multiple times for the same search. Avoid putting your personal info into the online portal searches at all cost, your credit will get more inquiries than 911.
This should be an easy one to anyone who has gotten multiple (very annoying) sales calls. Buying a special purpose (burn phone) is good policy because you'll always know what it's about when it rings and you don't have to monitor and screen your own phone. Also, you'll have a segregated record of all the calls and broker/lenders that you spoke with.
Truly the best weapon against unscrupulous players is common sense in most of the cases I've seen. Things brokers say they can and will do aren't always things they can perform on. If you're being asked to pay up front fees without specific term-sheet commitments stay away. If you're being told you have to take a (horrible-terms) small deal in order to qualify for a much larger (sweet-terms) deal stay away or at least get it in writing.
The best tip I can offer is to call me directly, I answer & return calls and it's my pleasure to talk with you about your businesses financing needs and explore the best options at hand.