- Houston small business loans help local entrepreneurs get starting and growth capital. While the process can seem daunting, especially for new business owners, there are a few things entrepreneurs can do to increase the chances of approval, and expedite the loan process.
- By Robert Celaschi – Special to Houston Business Journal Jan 20, 2012, 5:00am CST When startups in Houston need more money than the founders can muster, they have a number of resources to turn to.
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BANKS
If you’re thinking about starting, stabilizing or expanding your business in Houston, LiftFund is here for you with our small business loans. We use our own designated risk technology that looks beyond credit scores to provide you with the finance loan that best fits your needs.
Bank loans are considered one of the more traditional ways to finance a business. But due to market fluctuations and strict requirements, they are also some of the hardest loans to get approved. Often time a bank will require a potential borrower to have an alternate source of income, outstanding credit, a co-signer, or be able to provide significant collateral. Have a solid business plan to support your case, be persistent, shop around for the lowest interest rate, and keep in mind that you can also try other avenues, such as CDFIs.
In addition to carefully prepared business plans and financial projections, consider the 5 C's of Credit when approaching a bank (or any other entity) for funding:
Character (or credit history) - Refers to a borrower's reputation or track record for repaying debts.
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Capacity - Measures a borrower's ability to repay a loan by comparing income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio.
Capital - Lenders also consider any capital the borrower puts towards a potential investment.
Collateral - Collateral can help a borrower secure a loan.
Conditions - The conditions of a loan, such as its interest rate and amount of principal, can influence the lender's desire to finance a borrower.
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