As most apparel decorators know, owning and operating an embroidery or apparel printing business doesn’t necessarily make you a business financing expert. But guess what? Lenders don’t expect you to know everything. A good lender knows that while you’re the business expert, they’re the financing experts, and it’s their responsibility to find the best financing solution for your small business.
Money is an emotional subject. It affects how we live and work and how we make many of our decisions in life and business.
That’s why, with the help of Direct Capital, one of our preferred financing partners, we want to help you dispel your financing fears.
Protect Yourself from Bad Business Everybody knows somebody who has been swindled by one company or another. Now with business transactions taking place online more times than in person, trust is a key component of building a working relationship. Trust is even more essential when you’re talking about money and finances.
Our advice to small business owners and consumers is to know the company you’re working with. Make sure they’re well known and well trusted by taking a look at their customer feedback on sites like Trust Pilot, Yelp, and BBB.
Read the fine print of that contract before you sign it. If something isn’t clear to you, ask questions! Also, just because it’s in the contract doesn’t mean it’s not negotiable. Know what you’re signing so that in the end you aren’t locked into an unfavorable contract.
Know What Constitutes a ‘Good Rate’ In a society where we are rate driven and always looking for the “best deal,” we expect all financing terms to be alike when in actuality, financing rates can be calculated many different ways. Remember, not all calculations are equal.
A good way to determine the value of what you’re getting is to look at the monthly payment. Are you getting a monthly payment and term of loan that work for YOU and YOUR business? The most important factor is that you can afford to pay your bill on time, every time.
Remember, too, that when comparing quotes from different companies, make sure you’re comparing apples to apples. Be sure to use the amount you’re borrowing - the term of loan - to compare what you’re being offered for a monthly payment.
Fear of Not Being Approved Most people have a few skeletons in their closets, and lenders are aware of this. Credit reports are only one tool lenders use to determine a borrower's credibility. If your credit report shows a lack of past diligence in paying back your debts, you might be rejected when applying for a loan. This doesn’t mean that the door is closed to you and your business, however.
Sometimes very good people, for reasons beyond their control, have credit issues. And unfortunately, that’s a real barrier to entry in the world of small business. But there are other ways of addressing your businesses’ potential and ingratiating yourself with a lender.
Some lenders will also take into account your cash flow, collateral (current assets, such as mortgage, working capital, inventory, etc.), business credit, character and reputation, and capacity for growth. These are all factors that can positively influence your chances of being approved for a financing relationship with an established lender, so don’t discount yourself just yet! Study your options and find a lender who might be a good fit for you and your financial history.
How Will this Transaction Affect my Credit?
You may be surprised to hear that although your personal credit is used as a reference to determine your risk, you may only see an inquiry reported on your personal credit report and not the debt itself. Unlike most lenders, Direct Capital does not report your loan or lease on your personal credit report. Therefore, you can use your personal credit to help build your business credit without hurting for FICO Score, and you don’t have to sacrifice your personal credit for your business.
About Direct Capital, a Division of CIT Bank N.A.:
Direct Capital, located in the heart of Portsmouth, NH, has been helping small businesses across the country access the capital they need for more than 20 years. Since being acquired by CIT in August 2014, Direct Capital has been able to further maximize its reach in the small business market and it constantly looking for ways to innovate and improve customer experience.