Keys to Getting a Small Business Loan

In most instances, it is imperative for businesses to borrow money to start their company, expand, or even sell their companies. It is almost imperative for people to approach a bank and some people are hesitant due to the preparation and need to organize a great business proposal.

If a business owner has a good outline and direction for the company they may be in the position to successfully ask a bank for a loan. Preparation is the key. You may want to visit the bank and see what the qualifications and expectations are for the lender. It would be best to visit your own personal bank. You also may want to thoroughly fill out the loan application. You may want to seek advice from other people who have already done it. Visiting your local SBA (Small Business Association) office may be beneficial. The idea is to build partnerships with as many organizations as possible.

You should also make sure you have a clear plan on how you will repay the loan even if your business goes sour. You will also have to discuss and share your credit history with the bank. It is best to be in good credit shape.

You should also try to muster up a great deal of your own money to almost match or stand against the amount you are asking for. This will give the bank the impression that you are serious about your commitment and have already saved money for your business.

If the bank you choose declines you, that’s alright, just keep trying. One slammed door may equate one opened door. In the business world you will always run into obstacles and dry seasons but preparation and the willingness to never give up will help you achieve your goals.

The good part about working with a bank is the fact that they will help you determine what is good for your company. Make sure you take the time to work with a bank who takes time to understand your business and your unique credit needs.

  1. Develop a written business plan
  2. Show you have a personal investment and a financial stake in the business
  3. Prove you have management experience and have a great knowledge of the field of business you are venturing into
  4. Show that you have a record of maintaining adequate retained earnings
  5. Prepare a contingency plan in case things go bad.
  6. Develop a plan that can protect you if a key person leaves

The Truth About Loan Remodification Programs

Should You Hire an Attorney?

The Truth about Loan Remodification Programs

In essence, a loan remodification program, or “loan mod” is simply a renegotiation of your original mortgage with your original lender. It is not a refinance where you try to get a better deal with a lower APR from a different lender.

There are many types of programs available – some are government sponsored, and others are available with your own lender. However, getting one is next to impossible without knowing the ropes, and that usually involves hiring an attorney to get through the nitty gritty.

The problem with hiring an attorney is that they cost money. The logic here is clear: if you can’t afford to pay your mortgage, where are you expected to come up with the retainer and additional fees for a qualified attorney? It’s a catch 22 though.

Much depends on why you are looking at getting a remodification. If you are having trouble paying your mortgage, your lender might not even be interested in working with you, especially if you are current. They have no reason to decrease your principle or APR until you are faced with foreclosure.

If you are already receiving default notices that threaten foreclosure, fight back. For your own good, an attorney will be your best bet unless you are ready willing and able to just give your house back to the bank. If you truly want to stay there, and you do want to work out a deal where you can pay a more affordable housing payment, your best bet is using a reputable attorney.

Your main goal in hiring an attorney is this: during a foreclosure, there are many court hearings that happen and rulings are made and decisions are handed down on your behalf. The problem is the laws in most states specifically state that no one actually needs to notify you of these hearings! In other words, plans are being made that involve action on your part, yet you are totally unaware of these proceedings. It is quite conceivable that you could be under the impression that you are working with your lender and waiting some type of feedback, only to answer the door one day to be served with your final eviction notice.

Hiring an attorney precludes this from happening. One of the major tasks that your attorney will undertake on your behalf is to monitor court records to find out when your lender is requesting hearings. Your attorney will alert you, and he will attend on your behalf. He will also represent your best interests – something that is never done when these hearings are held literally behind your back.

Be careful whom you hire. Because of the recent surge in this burgeoning industry, there are many unscrupulous individuals out there who are willing to take your money, cash you checks, and disappear. Before handing over any money, research the individual, check for complaints with the local BAR association, and even ask for references from friends and neighbors. It’s much better to deal with established companies than single attorneys.

With or without an attorney, you will most likely go through what is called a three month trial period where you are required to pay only a portion of your original mortgage. During this period the bank or lender is doing a full financial vetting of your financial picture and taking into consideration your perceived hardship vs. your ability to pay.

However, if you do choose to pay only the partial payments the lender is requesting, you will be reported to the credit bureau as “making only partial payments” – even though the lender said it was OK to do this. Rather than making partial payments, make the full payments if at all possible. Once you are reported as making partial payments, your FICO score could take a significant hit of 50 – 100 points! AND when the lender finishes up your financial background check, as ridiculous as this might seem, your new and lower FICO score will be taken into consideration by the lender who helped cause the problem to begin with!

Before making any decision at all, and certainly before defaulting on your mortgage payments, find a good attorney who is experienced in these proceedings, and take advantage of a free consultation. It’s important to know your rights – your lender certainly isn’t going to tell you!