How We Determine Your Eligibility for Funding
We look forward to getting to know you. We will learn as much as we can about your business before deciding to move to the next step. As we review your application, we will look for several indicators to help determine the quality of the loan and eligibility for our programs. Positive indicators in these areas do not automatically guarantee that you will receive a loan, but do place you in a more competitive position. Conversely, a negative indicator may not preclude you from getting a loan. We review all loan applications on a case by case basis. Keep these loan quality indicators in mind as you complete your loan application.
- Profitability. Your business has been operating successfully and profitable for at least two years under current management. If not, you should include a detailed business plan and, in some cases, a feasibility study. Regardless of your current success, since you are typically looking for a loan to expand or start your business we will need to see two years of projections including a balance sheet and income statement for both years.
- Business Credit. Your business maintains a good credit history. Your business pays its bills within the agreed terms. Your business should not have any delinquent or derogatory credit.
- Personal Credit. You and all principals maintain good to excellent personal credit. Your Personal Credit Score should be above a 680. You should not have any derogatory credit.
- Liquidity. We look at your balance sheet for the last three years to determine your business’s liquidity. We will be looking to determine if your Debt to Worth and other liquidity ratios are better than your industry’s average.
- Cash Flow Coverage Ratio. The Cash Flow Coverage Ratio measures the ability of the company’s operating cash flow to meet its current obligations. We prefer the ratio for your business is above 1.15. You should have a secondary source of funding that could be used to pay off your loan or be used as cash flow.
- Business Health. We have an internal rating system where we rate several factors including management experience, business profitability, and business liquidity. A positive rating usually indicates a healthy business that may be ready to grow.