By James Chittenden

Businesspeople can get lost and discouraged when looking for their first round of business funding. Surprisingly, they can have greater success if they use a simple but often overlooked key to fast funding approval. 

Loans, investment, and other ways that businesses can obtain capital for growth seem mysterious. The overwhelming number of individual businesspeople would rather focus on performing services to the best of their ability, whether maintaining cars, websites, operating restaurants, etc. Whatever it is, most people are not finance experts, and don’t want to make the necessary effort to become experts.

The good news is that you don’t have to be an expert. However, you should however have controls and procedures in place to keep track of your finances. While we would all like to buy whatever we want whenever we want, most of us don’t have that luxury. Keep track of your money so that you can avoid ugly surprises. Glancing at your bank statements once per month is not enough. 

Manny shows you how do it right.

I was a business banker for several years. One day I received a call from a customer that we will call “Manny”. He wanted a $1.5 million commercial real estate loan. Before discussing his bank relationship over the phone or initiating an application, I had to “authenticate” him. Authentication involves a series of questions about his bank relationship that only the proper owner could answer correctly. He answered them correctly and without hesitation.

Businesspeople who are truly engaged with their finances normally have the correct answers at their fingertips, and willingly cooperate with procedures meant to protect their banking security.

Manny owned a meat store. The store had operated since the early eighties and he had accounts with our bank for about that long. His business accounts had healthy and substantial balances, with no recent history of overdrafts. Manny had been renting his store space, but wanted to buy the building he was in. He told me that he had offered $1.5 million for the building, but that the contracted price expired in 45 days.

His loan request fit our guidelines for owner-occupied commercial property (over 50 percent). There was an additional tenant, so he would be able to collect that rent as well.

I asked Manny if he has two years of business tax returns available, which he provided within an hour. I asked him for his most recent profit/loss statement and balance sheet. He generated them and sent them in under 15 minutes, while I was on the phone with him. I asked him if he had a sales contract. He did. I asked him how quickly he could order an appraisal. He said he would do it the moment we applied.

The benefits of Manny’s disciplined management

As a customer, he did everything right. He did his homework before calling us and responded quickly to our requests for documents.

As a result, he got his loan approved well within the required 45 days. The interest rate, while historically low, was discounted even further due to his deposit relationship and solid credit.

Key to Triumph

Manny was always prepared. Engagement with your business breeds preparedness, and preparedness increases speed while decreasing delays and hassles. His credit rating and deposit relationship also helped.

Banks compete to win the business of customers like this.

An approval isn’t a one-and-done event, where you can take your time closing on the loan. The fact is that approval windows close. Markets and the economy change. Banks shift policy. A “yes” today can be a “no” in six weeks. The reverse is true too. 

Stay funding-ready. It isn’t a destination; it’s a position to maintain. 

If you are not funding-ready, you can be in less than 90 days. 

What is this simple, but often overlooked key to fast business funding approval?

Just like Manny, you should be engaged in your business. Good managers and good CEOs know their business well. Like them, you should always have the right information at your fingertips.

It really is that simple. Have the right information at your fingertips. That means that when your banker is evaluating your loan and asks for financial data, either know it or be able to obtain it within minutes.

QuickBooks is a highly trusted accounting and bookkeeping platform, and it is surprisingly affordable (see options and pricing here).

• It connects with your bank.
• It connects with your CPA, CFO, or bookkeeper.
• It connects with TurboTax, which connects with the IRS.

A simple, but often overlooked key to fast business funding approval is keeping up-to-date books. 

If you don’t have QuickBooks or other accounting software, get it! Connect QuickBooks with your bank. Spend a few minutes per day ensuring that your books and banking agree. This process is called reconciling, and if you stay caught up with it, it makes your life easier when it’s time to seek loans or investments. Like Manny, you will be able to generate necessary financial statements within minutes.

• Reduce hourly charges from your CPA or bookkeeper.
• Provide quick snapshots of your business finances to bankers or investors.
• Position yourself as a high-quality, disciplined manager to bankers or investors.
• Increase the amount of capital you can receive, while decreasing the time it takes to receive it. 
• Monitor and guard your credit. 

And finally…

Welcome to One Click Advisor! We would be remiss if we didn’t give you a brief tour of the site and what it can do for you. Your challenges and opportunities can be sorted into one of three areas.

Marketing, because it brings in the customers. Start or continue that plan here.

Operations, because it keeps your customers. Start or continue that plan here.

Finance, because it is the scoreboard. Change the “score” and explore financing here.

Keep your books up to date can be simple. It is an often-overlooked key to fast business funding approval.