For a Cash Flow Loan, Small Business Loan Depot offers a unique cash flow loan based on the company’s gross sales. Since all business have sales, this allows almost all businesses to have an opportunity to qualify for a cash flow loan. Go to our features and benefits section to learn how you can solve your businesses cash flow needs.
For this cash flow loan, businesses can use their every day sales already on the books.
Businesses owners ask if they have significant cash flow and have demonstrated a lengthy past history of being able to amortize a long term debt, then why should they be denied based on limited collateral or unsatisfactory personal credit while have satisfactory business cash flow? We agree and can provide a cash flow loan to your business today. If your business has cash flow, we can work out a plan to get your business funding.
The Cash Flow loan features:
– Tough credit is not an issue. A program is available for almost all credit profiles
– Among the best qualification percentage of any business financing
– Every business has Cash flow, so every business has a strong chance to qualify
– Provide the most recent 3 months business bank account statements
– One page application
– Quick turnaround, a one or two day approval time is very common
– Very high approval rates
– Use this cash flow loan to obtain $10,000 to $250,000 quickly and easily for
any purpose, such as business expansion, advertising, inventory needs,
adding additional employees, new lines of business – any purpose.
– Very difficult transactions done routinely
– Your request is handled by an experienced consultant.
Complete the “Contact Us” Mini App on the menu above, or call Toll Free: 855-787-1113. Your call is free and an experienced industry professional will guide you seamlessly through the process.
The time in business required for this cash flow loan is only 3 months of cash flow statements. Once the time in business is 1 year or more, higher loan amounts can be approved. Credit scores can be as low as 500 and deposit dollar totals can be as low as $10,000 per month and 5 deposits per month. This is a relationship product and the initial approved limits are increased rapidly as this line of credit style product is reused. Businesses are able to obtain more funding through this method than with a traditional loan. If a business is approved for a traditional loan for $50,000 for 36 months, then they can get far more in working capital through this cash flow loan. With this product, if the customer is approved for $25,000 for a 6 month term all they have to do is renew every 6 months and they would end up with a total of $150,000 over the entire 36 months, which is 3 times what they would have received with the other traditional financing.
Credit score requirements for the cash flow loan are approximately 500 and higher in many instances. As the credit score increases, funding amounts will increase and the terms will improve
Call us at Tel: 919-771-4177 or Toll Free: 877-787-1113 and use your regular monthly sales to get a cash flow loan today.
Frequently asked Questions:
Question: Do we qualify? Answer: If your business has cash flow, has been in business for at least 9 months with the same owner, your business has an excellent chance to qualify for $5,000 to $150,000 depending upon that Cash Flow
Question: Do I need to complete a lot of paperwork? Answer: No. You will only need a one page application and the most recent 3 months business checking account statements. In many cases, only the most recent one month’s business checking account statement is required.
Question: What can I do if I need more working capital again later? Do I have to re apply from scratch all over again? Answer: No. Once the line has been established, you are an existing customer with us, the type that we value the most. You will have a very easy time using the credit line over and over again. In most cases, you either only need to place a call to authorize more funding, or simply provide the most recent statements to qualify for another round of this cash flow loan.
Question: What if I have bad credit?
Answer: The approval is driven very heavily on the cash flow. Even if you have difficult credit, it is the cash flow of your business that will be the main factor in the approval of the line.
Question: What do you look at in the cash flow?
Answer: The monthly raw dollar amount of deposits, the number of deposits per month, and the average daily balance. The higher the average daily balance, and the more that is deposited per month, the higher the approval amount will be. The most recent three months will be looked at. If the cash flow trend is upward, a higher dollar amount cash flow loan will likely be approved compared to flat or declining monthly dollar figures.
Question: I had a recent bankruptcy in the last 2 years, does that disqualify me?
Answer: Not necessarily. It depends on how recent the bankruptcy was and how the cash flow has been since then. If the Bankruptcy is at least a few months old and the cash flow since that time has been strong, there is an opportunity for a line to be established.
SBA 504 Loan program – The SBA 504 loan program is an economic development loan program that offers small businesses business financing and also promotes business growth and job creation. Through February 15th, 2012, $50 Billion in 504 loans has created over 2 million jobs……read more
Wyoming Chiropractor uses 504 loan program to expand Medical Office……read more
According to the Bureau of Labor Statistics report dated Friday, August 24th, 10:00 A.M., 6 million workers were displaced from January 2009 to December 2011 for jobs that those workers had held for more than 3 years. This figure does not include jobs in which the workers held the jobs for less than 3 years.
As of January 2012, 56% of those displaced workers have be re-employed.
According to the Thursday August 30th, 2012 report by the Bureau of Labor Statistics, Labor productivity, defined as output per hour, rose 1.9% in wholesale trade 2.2% in retail trade, and was unchanged in food services and drinking places in 2011.
Productivity growth was lower in all three sectors in 2011 compared to 2010. Unit labor costs, rose in wholesale trade and in food services and in drinking places in 2011, but fell in retail trade.
Get a niche Medical Practice Loan based on equity in business assets such as equipment assets or on the Sales of the practice. Every practice has Sales and Equipment. Do you know you can go to our features and benefits section and find a highly experienced consultant by clicking on our contact us link? You will understand and easily learn how the 2 programs, a loan against equipment and loan based on your sales are easy methods to improve your cash flow.
Call either of the following numbers. On Mobile you can tap either Tel # link, 1-919-771-4177, or 1-855-787-1113 and press dial.
You can compose and send an E-mail to firstname.lastname@example.org now by clicking on EMail me
For this leaseback Medical Practice Loan, physicians use equity in their existing equipment, such as X-Ray equipment, Monitoring equipment, Patient tables and chairs, Scanning equipment, as well as Dental equipment, or Chiropractic equipment in a refinance for an urban or rural Medical Practice Loan.
This product will allow you to raise from $10,000 to $100,000 quickly and easily for any reason, such Cash Flow, Expansions, Marketing, Inventory, Taxes, Employees, or equipment with flexible credit requirements. Total funding which can be obtained is usually in the $15,000 to $250,000 range.
Equipment condition and age is considered. The most valuable and newest equipment should be listed first on the application. Depending upon type, older equipment with full depreciation may be eligible for the program.
Tough transactions done routinely.
Application is fast and easy with a quick funding process. Generally only a one page app.
No upfront or application fee.
Your request is handled by an experienced consultants with over 25 years experience in credit and funding business loans.
Complete the “Application” or “Contact Us” Mini App on the menu above, or call Toll Free: 855-787-1113. Your call is free and our commercial representatives will provide detailed information on features.
A significant tax savings will can be realized in this Medical Practice Loan against equipment, by being arranged in part as a lease. This allows for a significant tax savings over a traditional loan. The borrower obtains working capital for their business via the equity in their equipment as opposed to having full ownership in their equipment.
Our Medical Practice Loan allows the practice to use both Medical and Computer equipment, which increases funding amounts. Up to 80% of the value can be obtained. Further Medical equipment that can be used in this asset based Medical Practice Loan includes X-Ray equipment, Diagnostic equipment, Imaging machines, Ultrasound, MRI machines, PET and CT Scanners, Infusion pumps, Medical monitors, and blood testing equipment. Dental equipment such as delivery stations and cavitrons. Computer equipment includes Desktops, Servers, Practice Software and Servers.
Your Practice makes money by using equipment rather than owning it. This Medical Practice Loan takes the unused equity out of equipment and uses it instead for cash flow.
Physicians can consult with a specialist about the loans by visiting or calling an office in their area. Offices are located in Miami, FL, Jacksonville, FL, Nashville, TN, Little Rock, AR, Dallas, TX, Houston, TX, San Antonio, TX, El Paso, TX, Austin, TX, Ft. Worth, TX, Denver, CO, Kansas City, MO, Chicago, IL, Detroit, MI, Indianapolis, IN, Louisville, KY, Columbus, OH, Cleveland, OH, Milwaukee, WI, San Diego, CA, Los Angeles, CA, San Francisco, CA, San Jose, CA, Oakland, CA, Las Vegas, NV, Reno, NV, Portland, OR, and Seattle, WA.Boston, New York City, Albany, NY, Syracuse, NY, Pittsburgh, PA, Newark, Jersey City, Patterson, NJ, Baltimore, Silver Springs, MD, Virginia Beach, VA, Philadelphia, PA, Phoenix, AZ, Norfolk, VA, Chesapeake, Richmond, Newport News, Charlotte, Durham, Raleigh, Columbia, SC, Charleston, SC, Atlanta, GA, Savannah, Orlando, FL.
09/08/2014 – For immediate release – Southern Sports Medicine Associates completes a $250,000 short term business line for expansion. Practice president Dr. Phil Stenson announced, “With this line, Southern Sports Medicine Associates can complete it’s expansion of services within the sports medicine community in The Alabama and Georgia market. The increase in future revenues will provide expansion opportunities into Atlantic coast states.”
08/21/2014 – For immediate release – Milton Medical Associates secures a $500,000 financing line for a buildout and expansion. Dr. Donald Milton, president, stated “With the line, Milton Medical Associates will complete it’s new aesthetic center expansion and offer aesthetic, laser and spa treatments. We will become a primary provider of aesthetic services in the southeast Texas region. We look forward to working with Smallbusinessloansdepot.com and further development of our line in the future.” Dr. Milton stated that the practice will add another fully licensed physician and offer Saturday and later evening hours.
The one page app and equipment list is submitted by Fax to Fax: 919-882-8541, or E-Mailed to email@example.com. Processing time is one to three days. After approval, time for funding is approximately one to three days.
If more funding is needed, additional funding can be arranged with additional funding “Parts” or “Segments”. Total funding that can be obtained is typically in the $150,000 to $250,000 range.
Apply today, call Toll Free: 855-787-1113, get the equity out of your equipment, and put some cash flow into your business.
Due to constant advances in the Medical field, Medical equipment equipment depreciates quickly. Many types of Medical equipment becomes totally obsolete in a short amount of time. However, Small Business Loans Depot can utilize Medical Equipment that has undergone full depreciation and is several years old.
The practice may have additional financing and working capital needs after the equipment refinance product is completed. Other available programs include:
Gross Sales Cash flow loan – This financing product may be very desirable for Medical Practices as it is based on the Gross Sales and cash flow of the practice. Medical practices often have significant cash flow, so this product can provide significant Working Capital to the practice.
This Medical practice loan product is used, in effect as a line of credit. The practice provides the most recent 3 months business checking account statements and a one page application. The average daily collected balance, the amount and number of deposits per month, beginning balances, and ending balances are reviewed in order to determine the approved amount.
The customer sends in the 3 months business checking account statements and one page application. Upon approval, the customer is E-Mailed documents. The customer completes the documents and faxes them back in. A final landlord check and verbal verification is completed. Funds are wired into the customer’s account within 1-3 business days.
Repayment terms on this Medical Practice loan range from 3 to 18 months. Once the customer satisfactorily repays the line, the line size is increased. The customer is not obligated to use the available line. They can reuse the line immediately or leave it idle for any amount of time.
If the customer provides the last 1 or 2 years tax returns and they are strong, the initial line size can be greater and future line increases can be more as well.
Sample Asset based Equipment refinance transaction:
Primary Care Physician PCP, Dr. Smith, in Lexington, Kentucky, 6 Years in business, 650 credit score with a Dun & Bradstreet Paydex Score = 65. Dr. Smith provides One page application and his equipment list.
Upon approval in 2-3 days, Documents are E-Mailed to Dr. Smith. Dr. Smith completes and overnights original docs back. A final verbal confirmation takes place within a day. In most cases there is no site inspection. Funding occurs in 2-3 business days.
In most cases, Financials and Bank Statements are not required. However, if the customer’s Financials or Bank Statements are strong, the customer can opt to provide to strengthen their application. If the customer has a strong credit bureau score of over 700 or over 725, financials may not be requested. Although there is a certain dollar amount above which financials are requested for this form of financing, there is often some discretion used by the lender. If the customer has a credit score of 750, then the lender may consider an extra $10K or $20K without requesting financials for a medical practice loan compared to a customer with a 675 credit score.
The lender has guidelines that they follow but they do have the authority to stray from the guidelines to a degree if they can justify it.
The following video provides an overview of the medical practice loan program as well, including features and benefits.
Frequently asked questions:
Question: What is the maximum we should apply for?
Answer: That depends on a few factors, but in general, a good rule is to
apply for not much more than the minimum amount that you need. If your
business needs between $50,000 and $100,000, then do not apply for
$100,000 to $150,000. Some applicants think that they should apply for the maximum amount, or “go for the moon”. They believe that the more they ask for, the more they
get. This is not true. With many lenders, the more you apply for, the more difficult it is
to get approved. With many lenders, if you apply for too much, they will simply decline
the request rather than approving your business for a lower amount. If your business only needs $50,000 in working capital but applies for $150,000, then it may be turned down completely and not receive any funding. In this case, the business should apply for as close to $50,000 as they feel they can.
Question: Are there minimum credit scores that are required for funding?
Answer: For the leaseback program, a credit score of minimum 650 is needed
in most cases for a medical practice loan. For the financing based on gross sales
which is based on the practice’s total receipts, there is no minimum credit score,
although scores above 500 are preferred and having a credit score over 600 allows
for more favorable terms and larger approval amounts.
Question: How long does it take to obtain funding? Answer: For this loan, the entire process takes approximately 7 to 10 business days. Upon receiving the simple one page application, the credit process takes from one to three business days. Upon an approval, documents are sent to the customer, which is same day. It will take one to two days for the customer to return the documents. After this, the review of the documents and verbal confirmation takes two to three business days. After this, it takes approximately one to three days for the customer to receive wired funds into their account, for a total of seven to ten business days for this medical practice loan.
Question: How much can we qualify for? Answer: The amount a practice can obtain for this loan depends primarily on the time in business, business credit, personal credit and cash flow. The cash flow may be demonstrated by either the business bank statements, or financials of the company, which could be a profit and loss statement, or interim financials, or previous years financials, or some combination of these.
Question: How much paperwork will be required? Answer: For requests under $50,000 just a one page application and asset list is required in most cases. If the request is over $50,000 and the business does not have both significant and strong business credit, then the company will probably want to provide an interim P & L, Profit and Loss statement. If the most recent three months business checking account statements are available adn they are strong, the company applying will also want to provide those bank statements. If this information is available, it should not be considered as documentation that has to be provided but information that will strengthen the application.
Question: What if we are approved for a medical practice loan, but for less than we need? Answer: If your business is approved for less than is needed, in many cases, a second funding segment, or “part” may be approved. This will depend on the strength of the company, but is often possible and many applicants are approved for significant funding. In addition, there are also other funding programs available under which the applicant may obtain funding. If one program cannot provide enough funding, another may be enough to get the customer all of the funding they need.
Question: What are the terms available? Answer: Terms for the asset based loan program are 24, 36, 48 or 60 months. For the Bank Statement Financing program, terms are shorter. Terms for this program are between 3 to 18 months.
Question: Is there an early payoff provision? Answer: Some of these medical practice loan programs are set up in part as a lease transaction for which the early payoff provisions are not as attractive as with other types of financing. In exchange, the tax write of advantages are often the most favorable of financing programs, often rivaling the mortgage loan deduction write off advantage.
Question: How can we qualify for a larger amount, such as $75,000 or $100,000 or more? Answer: In most cases, providing strong financial statements with increasing Gross sales and increasing net income will provide a strong boost in an effort to qualify for a larger amount. Another way is to prove the longest time in business possible. For instance, many businesses are not incorporated when they are first established. In many cases, they begin as sole proprietors or partnerships. These entities do not show up at the Secretary of State in most states. If a company began as a sole proprietor and remained as a sole proprietor for 5 years, then incorporated for 5 years after that, they may only been credited with 5 years in business. The lender will check with the Secretary of State and see only 5 years.
In cases such as this, the physician applying for a medical practice loan can provide the oldest business licences they can find to prove the full time in business. Another option is to provide the oldest financial statements available or schedule C they can obtain. This documentation will demonstrate 10 years in business which, all things equal, is considered significantly stronger than 5 years time in business. Some lending institutions, particularly traditional lending institutions do not seriously consider businesses with less than 3 years in business and will not provide loans, especially loans of significant amounts unless they the medical practice is more than 5 years old. As such, being able to prove more than 10 years in business in such an example will be especially helpful for a practice applying for a medical practice loan.
Question: Can we apply and qualify for a medical practice loan just in the business name?
Answer: While some Corporation only loans are approved, the vast majority of requests and approvals require the owner’s credit profile to be reviewed and on the paperwork as a signer at closing. For a company to have an opportunity for a Corporation only request, the time in business needs to be a minimum of 5 years with 10 years or more preferred. The company needs to have a strong business credit file with the major business credit agencies. A Paydex score of 70 or higher is required. Gross receipts will need to be strong, often over $1,000,000 per year. If the business is very strong on other areas, gross receipts less than this will be considered. The companies financials have to be provided and they have to be strong. Increasing gross sales and net sales are expected. The minimum net income reported is preferred to be $100,000 or more in most cases. Interim financials are requested and the same is requested for the interim financials.
Practice Analysis: How to determine what types of loans your practice should look at.
Many business owners, including medical practices, first decide which type of loan they want and like the best, then apply for that specific type of loan.
The first step in the process is to consider what are the practice’s strengths, such as cash flow, equipment, patient records, financials, etc.. Then look at which loans best match up with these strengths. Try to find out the guidelines and approval criteria for those loans, and along with your chief financial officer or a representative of those programs, determine which of these program your business is most likely to qualify for. Once you have determined which programs your practice will, or most likely will qualify for, list them in priority based on your practice’s needs and which will work better for your cash flow and medium to long term plans.
Is it really that significant to choose a loan that only uses some of your collateral? After all, I’ll pay it off soon enough. There are at least 2 major reasons to place major significance on financing that only uses part of the practice’s collateral. The first one is that it gives the practice much more opportunity to acquire additional loans if in 1 or 2 years it unexpectedly realizes it could use additional financing for other purposes. If this occurs, the practice will have collateral available that it may be able to leverage for other financing. The 2nd reason is that if there is an unexpected downturn in business or natural disaster and the practice has difficulty paying the loan, it will be less likely that the entire practice is in jeopardy.
Thank you for visiting our Medical Practice loan resource page!
Visit the SBA and learn how to create a business plan. Help with financial statements is available.
When a business is considering a leaseback, what percent of the value of the computer equipment will the loan typically be for?
In a leaseback transaction, the owner of equipment sells the asset for cash and leases it back, obtaining working capital. When the transaction involves computer equipment, the percentage obtained against the asset will typically be lower than for other equipment. The percentage will vary depending upon other factors such as time in business, business credit, personal credit and the amount of the request.
Get a leaseback on computer equipment now by calling Toll Free: 855-787-1113 today, or simply complete the “contact us” form in the menu bar above and representative will contact you!
The percentage loaned against the asset in a leaseback will range from 20% to 80%. Computer equipment depreciates in value very quickly. After only 1 year, the equipment may often be worth only 75% of the original value, sometimes less. This is a significant drop.
While the technology is almost always important in a leaseback, the technology needs of other types of equipment will usually not be as great. This includes restaurant equipment, construction equipment, machinery, and vehicles.
The quick drop in value has consequences that do not happen as severely with other types of assets in a leaseback. Because the value drops so much so quickly, if any party is forced to sell the equipment after 1 or 2 years, the market for selling this equipment becomes difficult because the technology updates so rapidly.
Since technology requirements are such a significant part of the reason updated computer equipment is purchased, buyers of computer equipment, especially businesses, may not be motivated by the price difference. A higher priority for businesses will often be the technology that allows their business to function as efficiently as possible. Businesses need to offer their customers the best service. Businesses also need to be up to date against their competition and preferably, have an advantage over their competition.
Due to this, in a leaseback loan transaction, they will likely be offered a low percentage against this type of equipment due to the difficulty and lower return in the event the equipment has to be sold.
The supercommittee was established in the aftermath of the debt ceiling debacle to recommend solutions to the federal budget deficit. It’s due to report recommendations by November 22nd. Will it’s recommendations affect small businesses?
The answer is most certainly yes and indications are it appears the expected decision by the supercommittee certainly affect businesses in a negative way in the short and medium term.
The supercommitte has to decide whether to recommend just spending cuts, or a combination of spending cuts and higher revenues, a euphemism for higher taxes. If the supercommittee provides recommendations that are heavy or solely cuts, expect steep cuts to major government programs in the next few years. This will have to include cuts to major programs such as Social Security, Medicare, Medicaid, NASA, and defense, if the reason for the existence of the supercommittee and it’s goals are to be met. It will have to result in cuts to many smaller programs such as farm programs, the small business administration, the department of Transportation, and others. This will affect small businesses in many ways.
Medicare / Medicaid – Many physicians accept Medicare and Medicaid patients. When Medicare and Medicaid are cut, both programs will likely be forced to lower the reimbursement rate to doctors seeking reimbursement for services they have already provided to their customers. This will further cut into the profits of medical practices, lowering their gross receipts and profit margins. Many physicians may feel that they cannot run a profitable enough business. This will result in many physicians and medical practices discontinuing to accept Medicare and Medicaid patients, or discontinue accepting new Medicare and Medicaid patients.
Defense and NASA – If the defense department is significantly cut due to the recommendations of the supercommittee, it will have a major affect on many businesses across the country. In addition to the large defense contractors, there are thousands of smaller contractors that work with the larger contractors. There are even smaller companies that contract with these smaller contractors. Many more businesses derive their revenue simply by being located in the area of the largest contractors. Businesses such as restaurants, gas stations and retail shops will all take a hit. The defense department is at the top of the food chain and any changes have long tailed effects. With a budget in the $700 billion range, a $100 billion or $200 billion dollar cut can have a major affect on the economy.
Other programs – Other cuts by the supercommittee may affect the Small Business Administration, farm programs, the department of transportation, the department of education, and a long list of programs.
The mainstream perception is that there is major pressure on the supercommittee to cut spending, and that doing so is a good thing. There has been very little discussion of how it will affect the economy. Long term effects of a lower budget deficit will be positive 5 to 10 years out. However, cutting spending in the short and medium term, as outlined above, will negatively affect many businesses. Revenues will be lower, contracts will be cut, businesses that are indirect recipients of the government programs will see lower sales as the businesses they feed off of have lower revenues.
In short, spending cuts by the supercommittee means less money to businesses, regardless of the issue whether the government has been overspending or not.
A – The SBA (small business administration) may get hit with cuts along with the many other non defense programs. Small businesses are having a very difficult time now getting loans from banks. If the SBA loan programs are cut back in funding, businesses will have even fewer options than they had before.
B – Farm Programs – Currently, farmers and businesses related to farming sometimes need government programs to assist them during times of droughts, early frosts and other times of crop destruction. Reductions in these programs will put farmers and related industries under greater pressure and more farmers may be forced out of business.
C – The department of Transportation – New highway construction programs, highway repair, rail programs such as Amtrack, funds for building and updating shipping ports will all take a hit if the department of transportation is cut.
Get ready for the next round of news from the new super committee.
The super committee has the responsibility to agree on spending cuts and possibly revenue increases shortly before thanksgiving. Find out what cuts they are considering, it is destined to affect tens of millions of citizens for years into the future.
business rental lease space – how long should one sign a lease for?
If one bases the decision just on the numbers, the longer the better since most times the landlord will give better terms on a longer lease. However, the business owner signing the lease should proceed carefully. There are other important considerations that can alter the decision.
Foot Traffic – The foot traffic of the location will influence the volume of business. If the foot traffic is light, this may significantly decrease the amount of business that comes through the door, which will affect gross receipts over the course of the year.
Statistics provided by the city when a business rental lease space has been found are important. Those statistics may include demographics, population statistics and trends, average income information of the area, and homeowners versus apartments are all important statistics.
Visual Inspection – Possibly nothing can replace a visual inspection of the potential business rental lease space prior to signing the lease. Sit within a line of vision of the location and watch for several hours, and for several days. Watch on Mondays, watch on Fridays and on weekends. Watch on different weeks. Is the traffic extremely light in certain times and heavy other times? Do some advance work. If normal closing time is 7:00 P.M., do people walk out of restaurants late and walk by the location? Question whether such people are potential customers if you will be the new tenant of that business rental lease space.
Seasonality – In the analysis, it should be considered whether the business is seasonal, or even partially seasonal to begin with. If so, the time of the year should be factored into the analysis.
For any business rental lease space being considered, if a thorough analysis does not yield total confidence that heavy customer traffic will be a sure thing, then a shorter term lease should be signed.
Signing a long term lease may result in better terms, but if the renter has misjudged what the sales will be, a long term lease may be devastating to the business. Instead of a 3 – 5 year lease, consider a 1 or 2 year lease the first time. If sales are soft and a strong effort has been made to promote the store, lower sales can be used to justify the best terms possible if a renewal of the lease is done.
If sales are strong, then the shop owner may have lost some money in the terms of a new lease, but this may worth the cost to help insulate them from the risk of being in a long term lease they cannot afford.
The landlord may not have sympathy if you are having a difficult time meeting the monthly rent. Ultimately, protecting your business with a shorter term lease on a business rental lease space can prove to be the best decision.
On financing requests, the business checking account reference is often requested. Many business owners do not wish to provide it for privacy reasons. Is it needed and is it helpful?
If the business checking account reference is requested, it is often a normal request and often not even checked. In the past, it was standard procedure to contact the bank, verify the opening date, current balance, average balance, insufficient funds and overdraft history.
More recently, the bank reference is not always checked, and is at the discretion of the lender to do so. Even though the reference is still asked for in most cases, there are several reasons why the applicant should want to provide the reference and not feel it is a privacy issue.
The applicant is approaching someone else and asking for something – Many borrowers feel whether they should provide a business checking account reference is up to them. They also often give an opinion if it should be relevant or not in the analysis. Since the borrower is approaching another party and asking for something, it is really the right of that party to decide what to ask for from the applicant.
The bank information may be a strength for the applicant – Providing the bank info will not always be a weakness. If the applicant has strong business checking account reference information, it is a strength for the applicant and they should provide it. If so, it will help their chances of being approved. It may also help them be approved for a higher amount and better terms.
The bank information may be a weakness for the applicant – If the applicant’s business checking account reference is weak, it can hurt them and they should not voluntarily provide it if it is not requested. Weak bank statements may include low beginning, ending and average balances. It can also include NSF – insufficient funds and overdraft history. If an account has any of these, it may hurt the applicant.
Privacy Concerns – Privacy concerns are sometimes a significant issue. This is understandable. If the applicant has such concerns and their account statements are strong, they should consider resolving these concerns through other means.
The applicant should talk to the representatives further if they need to get a higher comfort level. Research the company at the better business bureau and with the state to see if there is any negative information on the company. If not, and the company has been verified, providing the checking account reference information should be acceptable.
When it comes to a new retail location, what is the best way to judge foot traffic?
Many businesses, especially retail businesses, including franchises, spend significant amounts of time and money assessing what they can expect in terms of customer volume or customer foot traffic. Things such as government population block statistics, demographics, tax revenues, year to year growth, and other factors are considered, and may very well be critical.
However, in some retail situations, simply closely watching the foot traffic in a shopping center or district over a period of hours on many days and weeks, may be crucial information. If this is not done and is lacking in the decision making process as to where to locate, it can prove highly detremental to the business.
A retail business may have found a shopping center or shopping mall for which the ownership can show strong sales for the center and mall overall. They may also be able to show strong income statistics on residents in the area. However, other details need to be looked at.
If the shopping center or mall is large and has a second and even a third floor, the actual customer foot traffic should be looked at real time over the course of hours and even weeks or months. What should be considered is:
Seasonality – Is the location or center seasonal, does it receive business seasonally, or is business steady throughout the year?
Sales of Largest Stores within Shopping Center – The center or mall may have strong sales overall, but maybe those are total overall sales statistics for the mall as a whole. Many shopping centers or malls have large anchor stores which may bring in a high percentage of the sales for one store, thus possibly skewing the statistics for the whole center.
Location of Store within Shopping Center – This can be the most important factor. A shopping center or district may have strong sales but depending upon the actual location of the store, sales may suffer if the location, even within a successful center or mall are strong.
If the location is in the back of the mall, in a corner, or around a corner, this fact can devastate sales. All it can take is for a store to be just a few doors down from the heaviest traffic area for it to make the difference between success or not.
Another factor is if a store has a higher floor locations, and if so, where on the higher floors is the store, and how is the layout. In many shopping districts and center, shoppers start out and often stay on the ground or main level and will not go to the trouble of getting to the higher levels.
This can be particularly true of 2 level shopping centers or malls for which many shoppers are using the stairs. Many shoppers will simply not use the stairs and will stay on the ground floor. Another difficulty is that of the percentage of the shoppers that do use the stairs, a significant percentage of those will shop a less extensive area of the stores than on the main level. They often will only go to the first several shops in the higher level. If a store in such a situation is on the 2nd level and far from the main stairs and elevator, this can have a major impact on sales.
As a result, the location of a retail store within a shopping center or mall must be carefully considered, both statistics wise and in person.