Unleash the power of fundability, what is fundability? Fundability is
your business’s ability to get funding you can make it harder or easier for
your business to get money a lot of the power is in your hands
every business should build for fundability a business starts with no credit
profile therefore what’s on your application is
all that’s reviewed for approvals so your application must be very strong
most companies fail in their first year half of all companies fail in their
first five years and two thirds in the first ten as a result new businesses
don’t seem fundable to lenders. Let’s look at your industry. The first
step in fundability is your businesses industry. Some industries are considered
more risky than others when it comes to traditional funding sources added risk
can mean stricter underwriting guidelines or even no funding at all
Let’s look at your business name check with your Secretary of State they might
require that a business name be unique keep the name of a high-risk or
restricted industry out of your business name. Chico’s Bail Bonds can be renamed
as Chico’s this is above board and honest a full business name should include any
recorded DBA filling you use let’s look at your business address a
business address must be a real brick and mortar building it must be a
deliverable physical address this can never be a home address or PO box
don’t use UPS mailing addresses some lenders will not approve and fund unless
this criterion is met. Lenders will check USPS and places like
Google Maps to see if you’re using a home address if you are you often get an
immediate decline, never use a home address on your application not even if
your company is just you. You can use a virtual address we like Regus, Davinci
and Alliance. Let’s look at your business phone and
Fax numbers and a 411 listing you need a Fax number or an eFax as well set it
to go straight to email a cell or home phone number as your main business line
could you get flagged as unestablished but VOIP is okay you must have a
dedicated business phone number, business phone and fax must be listed on
411 via listyourself.net your business phone numbers should be
toll-free 800 exchange or comparable. Let’s look at your business bank account
you must have a bank account devoted strictly to your business this helps it
at tax time the IRS does not want you commingling funds make accounting easier
and reduce the risk of audit keep personal and business funds separate the
simplest way to do this is with a separate account the account opening
date, is the businesses opening date far as lenders are concerned a longer
history is better. Let’s look at your business bank
accounts and your business financials, you always need to be looking to the
future, that future is bank and other loans and other kinds of funding set
your business up for bank loan approvals success keep a balance of $10,000 or
more for at least three months to get a low five bank rating this way most
conventional banks see your corporation as fundable if you don’t have a low five
you can still get corporate credit and alterative loans but you would not be
able to get a conventional loan bank ratings measure how responsible the
account owner is with funds let’s look at your time and a business a
company in business for a few months to a year has more options for funding,
startups don’t have tax returns to show lenders or too many other ways to show
profit and the responsible use of finances. This is another reason to open
your business bank account ASAP that way your time in business is get as long as it
can possibly be. Let’s look at your Business Entity and EIN,
get a free EIN for your business at the IRS website to truly separate
business credit from personal credit, business must be separate legal
legal entity not a sole proprietor or partnership a corporation or LLC
business entity gives you more credibility in many cases these entities
by default eliminate your personal liability other entities don’t make sure
your entity is set up in the same state as your business address verify all
listings show the same name, address, phone numbers, etc. as in state and other
records. Let’s look at your SIC and NAICS Codes
the IRS website is also where you choose SIC and NAICS codes, industries are
categorized by two kinds of codes SIC Standard Industrial Classification and
NAICS North American Industrial Classification System you choose these
codes be honest when you choose yours, but there’s no reason to choose the
riskiest code if a less risky one might apply.
Let’s recap take control of how likely it is your business will get money, how
fundable it is having a proper business address, phone and fax numbers website
and email are vital setting up your business with the IRS and getting an EIN
and choosing a corporate entity are all important get set up with the business
CRA’s so you can start building a record and the best record comes from paying
your bills on time your personal credit quality and financials play a part and
keep your records congruent so lenders can find out everything they need to
know about your business. Contact us today to learn more about how
to unleash the Power of Fundability.
