Starting a business and building business credit is different in the U.S. than other countries. Our partner Nav explains the differences, difficulties, and tips about building credit as an immigrant.

While business credit is not required to start a business in the U.S., it is important to know how and when to start building it for your business’ financial security. Find out here  – read this post from our partner Nav.com.

During a conversation with a business woman at a recent small business conference, I realized that starting a business in the U.S. is significantly different than starting one in other countries.

The business woman who I spoke with was from Canada and was asking for information on how to open a U.S. location for a business she was already operating in Canada. She was concerned about building business credit because she believed she had to have business credit to start a business in the U.S.

Fortunately, business credit is not a requirement to start a business and anyone who has legal status to work in the U.S. can start one. That said, business credit is important to build and monitor for any business owner because it can help you get better funding, lower your costs and protect your personal credit. There’s no better time to start building your business credit than the time you start your business.

Starting a business for a new U.S. immigrant includes the same steps for any U.S. citizen, however, building business and personal credit is a little different.

Personal Credit Plays a Big Role

To build business credit, personal credit is required. This may be very different for a U.S. immigrant who may be used to a system where personal and business credit are completely separate. Just like the business woman I spoke to from Canada, an immigrant may be under the false assumption that personal credit has nothing to do with business credit. But, in order to start building business credit, you’ll need to use your personal credit.

Unfortunately, as an immigrant, it is highly likely that a person has a significant disadvantage when it comes to personal credit in the U.S. Here’s why:

  1. It is likely that the credit bureaus do not have a credit profile on a new immigrant. Typically, a social security number is required to start a credit profile and new immigrants generally receive a social security number as part of their immigration application process, or shortly after they arrive in the U.S. What this means is that a new immigrant will have trouble building personal credit in the U.S. before they arrive in the country.
  2. It is more difficult to build credit when you’re first starting out. As a new immigrant with a new social security number, creditors may be wary of extending credit to you. It may take several applications for small credit cards/lines before you may be approved. Once approved for at least one account, the account has to be active for a period up to 6 months, depending on the credit bureau and scoring model, before a score can be calculated. It’s also important to remember that the account must be a positive account. After time, it will be easier to be approved for additional credit accounts. It also might be easier to start building credit by financing a vehicle. It is generally recommended to have at least one auto loan and a few credit cards on your credit profile to establish a strong credit foundation. This process can take several months.

Building Business Credit

As you build your personal credit, you’ll need to focus on a few steps to set up your business and business credit.

Business credit is not necessary to start a business in the U.S. as it is in some countries. A person simply needs to file the required legal papers with the Secretary of State in the state where the business resides, apply for a local business license and get a U.S. employer identification number or EIN.

Business credit bureaus comb through public records, including secretary of state filings, for new business records. Eventually, the bureaus will find the filing for the new entity and a profile will be created for the business. This is helpful, but not the only thing that needs to be done.

Once a profile exists with the bureaus, it is important to make sure that the information the bureau has on your business is correct. Focus on business identification information such as address and type of business as well as making sure the number of employees and annual revenues are reported correctly.

Once you have a business credit profile, you can start working towards building your business credit and obtaining a business credit score. Start building your business credit by applying for business credit cards. There are three basic ways to do this:

  1. Open a gas card account under your business name.
  2. Obtain one of the basic business credit cards provided by major credit card issuers such as American Express or Capital One.
  3. Open business accounts with vendors such as Home Depot or Lowe’s.

As you continue to open accounts under your business name, they will begin to report to your business and your profile will become scoreable.

Building business credit as a new U.S. immigrant is not that much different than building business credit as a U.S. citizen. The real difference is with personal credit and making sure you take the right steps as soon as possible to start building your personal credit.

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Felipe Pacheco turned his lifelong passion for computing into a successful business by serving Latino business owners in need of point of sale systems and software. Tekxcel has grown to serve 130 customers in the Latino community thanks to a micro business loan from Opportunity Fund.

Our customers inspire us every day and we want to regularly share those stories to inspire you, too. This week, read about Felipe Pacheco of Tekxcel in San Jose.  The former network administrator at Oracle turned his lifelong passion for computing into a successful business by serving Latino business owners in need of point of sale systems and software.  

Connecting Latino Business Owners to Technology Solutions

When Felipe Pacheco started Tekxcel in 2008, he saw a need within the Latino business community for improved point of sale systems, including restaurants, retail, and professional offices.

“We saw there was room for a company that could get computer systems to those customers,” Felipe said. “We noticed that most of them didn’t have those systems.”

Felipe got his start in the technology sector by working as a network administrator, most notably at Oracle.  He felt a strong pull toward entrepreneurship, which led him to the previously untapped Latino business owner market.  He also helps these underserved entrepreneurs by cutting through the Spanish language barrier.

He put his two strongest interests together to create a unique Silicon Valley small business, but financing challenges made it difficult for his business to thrive.

Opportunity Fund Helps Tekxcel Stay Online

Initially Felipe wanted funding to secure Tekxcel’s cash flow and improve his equipment inventory.

“When we first started, we had to wait to get payments from some of our clients,” he said.  “I needed equipment ready for installation.  Now we have everything we need.  Before, we were always running to the store to buy tools or cables when installing a system.  We don’t have to do that anymore.”

Felipe’s search for funding included unsuccessful attempts with his bank and other alternative lenders.  Tekxcel’s cash flow issues made it difficult for Felipe to get the financing he needed.

Opportunity Fund loan consultant Miguel Angel Barreras helped Tekxcel with a $10,000 loan in 2013. The partnership continued through two additional loans for $15,000 and $20,000 respectively.

“We got advertising for other lenders, but I said no to them,” Felipe said. “If I need something, I go to Opportunity Fund.   They said yes to me.”

Felipe Pacheco - Tekxcel

Felipe Pacheco, owner of Tekxcel Point of Sale Solutions, smiles while at work (Photo courtesy of Christian Peacock)

Since partnering with Opportunity Fund, Tekxcel has been able to keep a complete inventory.  He also credits Opportunity Fund for helping him improve his credit score thanks to on-time payments and affordable rates.  “My score has improved a lot, maybe by a couple of hundred points,” he said.

Felipe pointed out that while it was hard for him to break into the market due to difficulties with convincing business owners to start using updated computer systems, Tekxcel has expanded over the last three years to serve more than 130 customers in retail, restaurants, and other industries.

We’ll be there to support the next wave of Tekxcel’s growth.

We hope this story has inspired you, too.  At Opportunity Fund, we offer easy-to-get, fast, and affordable small business loans to help small business owners succeed.  Visit our home page to find out more.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

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Implementing affordable marketing strategies really make a difference for your small business’ growth. Our partner Nav explains why using Twitter to market your business is important and how to make the most out of this invaluable and low cost tool.

Marketing strategies really make a difference for your small business’ growth. Find out how Twitter can help it grow – read this post from our partner Nav.com.

Given the number of consumers who use social media, your marketing strategies for various platforms can be as influential for your small business’s growth as what’s on your business credit report.

Take Twitter, for instance. Per the site’s data, it has 316 million monthly active users who send 500 million tweets each day. 500 million is a daunting number, and you might be wondering how your business is going to get noticed in such an enormous sea of tweets.

Here’s a look into how Twitter works and how you can cut through the noise to promote your business to potential customers.

Twitter Caters to Businesses

Twitter has carved out tools for businesses, including separate tips and hints for small businesses. Not only is it a contemporary marketing avenue, but it is also free if you’re using basic features.

After you set up a profile, start following other businesses and individuals you know or work with that you think might follow you back. This is a good starting point to building a follower base. Start posting tweets to update your followers on your business, or tweet content that’s related to your business and relevant to your growing group of followers.

Once you have a few tweets with good content, try to identify individuals that fall under your target market. Follow your current and potential customers, and tweet about upcoming sales, discount codes, and new products and services. Take advantage of hashtags, which are highlighted keywords preceded by a pound sign (#) in tweets that make your posts easier to locate in Twitter’s internal search results.

If you have some room in your budget, you can promote your account or use promoted tweets. These are direct advertisements that are placed in the Twitter feeds of users who may be interested in your products or services. This functionality can be paired with your customer relationship management information to better define the parameters of your ad campaigns and reach a wider base of new customers.

Marketing in the Twitterverse

Twitter is one of the many 21st century versions of word-of-mouth advertising and has unique demands if you want to use it effectively. Here are some tips for marketing via Twitter:

Interact with other users. Retweet, favorite, message, and tweet to other users in your posts. Doing so will not only engage another user, but will give you exposure to their followers, and allow you to create alliances with other active Twitter users interested in working together to build an audience.

Tweet often. At the very least, post one tweet per day. If your account appears dormant, customers may not be as engaged with it.

Offer exclusive deals to your followers. Keep users interested and engaged by tweeting about promo codes or flash sales that are exclusive to your Twitter followers. Offer to send freebies to your brand advocates who promote your business on Twitter.

Use hashtags. If you’re in the business of paper sales, users can search for tweets related to paper and find your business. However, if you use hashtags, your tweets become more visible in the search results. Tailor your hashtags to your business and current ad campaigns.

Use news to stay relevant. Is there a breaking story or event coming up that you can twist to relate to your business? Post a tweet about it and latch onto relevant hashtags for more visibility.

Use Twitter to promote original content. Take advantage of integration features for your own website, and always post content that will direct your followers back to your web page.

Bonus: Use Twitter Analytics For Free

Under your profile drop down menu, you can access Twitter Analytics. See how your account performs from month to month and track your growth. Understand what content is working and what isn’t by tracking your Tweets’ impressions, favorites, and retweets.

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Want to launch a food truck? Read these smart planning tips on how to run and finance your mobile food business.

Thinking about jumping into the rapidly growing, one billion dollar food truck industry? Mobile food service includes food trucks, kiosks in malls and airports, mobile catering, and concession carts. Planning is key to successfully starting a food truck business.

Planning is Key to Food Truck Business Success

Create a business plan: As with any new business venture, planning your food truck business is important. Decide how much you will spend to buy your food truck and how you will finance the food truck cost. Look into potential locations, local permit regulations, local customer tastes, how you will market on social media and what the competition is. Research online, and talk with other operators in your area to see what other tips they have for how to start a food truck.

Plan your menu: Although you may already have an idea what kinds of foods you want to serve, keep in mind that you will need to make food easily transportable to and from your off-site commercial kitchen. It is also important to consider how you will serve food, because customers want something they can easily carry around.

Establish your business: What type of business you are determines tax obligations and personal liability. There are four types of businesses: sole proprietorship, partnership, corporation, and limited liability company. In the food truck business, you will most likely be a sole proprietor or a partner.

Secure financing: Funding your food truck business is one of the most important steps. Startup costs can run over $80,000. A lot of traditional banks reject food truck loans because they are high risk, and the loan amounts are often too low to make the bank a sizeable profit. Alternative lenders, like Opportunity Fund, specialize in these types of micro loans and work together with food truck entrepreneurs to achieve financial success.

Buy a food truck vehicle: Whether you plan on using a catering vehicle, truck or cart, make sure to research and price-match. Food trucks can cost from $5,000 to upwards of $60,000 depending on specialization and size needs. You can sometimes rent or purchase used vehicles for much less.

Secure commercial space: The benefit of running a food truck is the lack of expensive real estate rent, but you still need commercial space to operate. This includes somewhere secure to store your vehicle like a garage and a commercial kitchen. In California, current law requires food truck businesses to prepare the food beforehand in a licensed commercial kitchen, also known as a commissary.

Double check all licenses, permits, insurance, trademarks, etc.: Acquiring all the necessary state and city permits and licenses may be tedious, but it is essential to successfully starting a food truck. Some cities have parking restrictions and additional policies. Health inspectors usually check yearly, but may also check in randomly. They will check the commercial kitchen you prepare the food in, the garage in which you store the food truck during off hours, and the vehicle’s facilities itself.

Run a smart business: Once your food truck is ready to roll, the hard work really starts. Dealing with emergency situations and regulation changes can be stressful. Keep a close eye on your cash flow, inventory levels, new laws, and customer responses. Most importantly, manage for profit and finance from responsible lenders to keep your business out of debt.

We Know Mobile Food

If you have eaten at a local food truck, you have probably seen Opportunity Fund at work because we are the #1 lender to food trucks in California. So far, we have lent over $10.8 million to almost 300 food-related small businesses.

Onigilly is one of the many food truck businesses Opportunity Fund has helped get a loan. Koji’s “samurai sushi” had great potential, and our $10,000 loan helped him purchase a food truck. Since that first loan, Koji has been able to expand into two brick-and-mortar stores and hire 20 people. We are honored to have helped Koji achieve his dreams and start his own food truck business. Read more about Onigilly’s success here.

When you want to take out a loan to buy your food truck, you want a reputable lender who has your interests as the top priority. Because of our dedication to helping food truck business owners get the loans they need, we are confident we can help you get yours. We want to make sure your loan helps your business thrive.

Opportunity Fund has several loan options available for mobile food businesses. From $10,000 to $100,000, we offer loans with easy qualification, low APR rates, and short wait times of 5 days or less. Take a look, and you will see how easy-to-get, fast, and affordable our loans are.  

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook  and Twitter

One of the toughest challenges for small business owners is getting enough funding. When a business can’t get the required capital it needs, it is underbanked. Keep reading to learn what being underbanked means, why it is a problem for your business and your community, and what options are out there for underbanked businesses.

According to the National Small Business Association in 2015, 31% of small businesses do not have the financial capital needed. This means that one third of small businesses are “underbanked”. Being underbanked damages local communities and hinders small business growth.

What Does “Underbanked” Mean?

First, it is important to define what being underbanked means. Being underbanked generally means limited access to adequate financial services. This applies to individuals, households, and businesses. Banks avoid certain clients because of bad credit or other barriers, which forces those denied banking services to turn elsewhere.

Small businesses often require loans to operate and expand, especially in the beginning and during hard times. Millennial, low-income, minority, and other disadvantaged entrepreneurs are impacted most when denied a bank loan. This limited access to traditional finances leads to reliance on alternative financial services such as merchant cash advances, crowdfunding, and community development financial institutions (CDFIs). Some of these alternative options are bad, and some are good—like Opportunity Fund!

Why Is It a Problem?

Being underbanked is a problem for both you, as a small business owner, and the surrounding community.

When you need quick solutions, you may fall into bad loan situations. Read our post on Merchant Cash Advances about how they are especially bad for underbanked business owners. These fast cash solutions often end up costing more in the long run.

In addition to paying too much for bad loans, being underbanked hinders business growth. Small business owners look for banking options with low fees. Because they don’t pay a lot for account maintenance, they are often unable to access specialized account features that are necessary for real growth.

Small businesses stimulate local economies by providing employment opportunities and keeping local money circulating within the community. When small businesses suffer or close because of lack of funds, neighborhoods lose their charm and walkability. Business giants buy up real estate left behind by these underbanked businesses and start to gentrify neighborhoods with big-box stores and cookie-cutter services.

How to Get More Banking Access

Now there are more and better options for the underbanked. Credit unions and traditional banks are trying to help underbanked small businesses find the money they need by partnering with credible alternative lenders. Opportunity Fund and the Responsible Business Lending Coalition created the Small Business Borrowers Bill of Rights. This Bill of Rights ensures responsible and productive lending practices from traditional and alternative lenders.

If you find your small business underbanked, the first step is to educate yourself. Reading blogs like this helps you better understand how to navigate and succeed in the financial world. It is important to research different funding options and to know the financial health of your business before it is too late. We hope to provide you with resources that can help you and your business succeed.

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Not qualifying for a bank loan can be disheartening. Our content partner Nav shares four types of businesses that usually don’t qualify, five reasons your small business might not, and options for successfully funding your business’ needs.

Understanding why your small business might not qualify for a bank loan can save you time and confusion. Find out what those reasons are – read this post from our partner Nav.com.

Small business is booming, but you’d never know it judging from small business loan approval rates. Although the economy is rebounding from the 2008 financial crisis, not much has changed for those seeking small business loans from traditional banks. At just 21.3 percent approval rate in January 2015, less than a quarter of small business loan applicants receive their loans.

So, what kind of shot do you have at securing funding? And do you even qualify for a small business loan from a traditional bank? We’ve got the answers. Here are the types of small businesses that typically do not qualify for small business loans from traditional banks:

  1. Sole Proprietors – There are more than 28 million small businesses in the United States, and a whopping 23 million of them are sole proprietors. Unfortunately, if you’re a sole proprietor, the numbers aren’t in your favor. Traditional banks view sole proprietors as high-risk because there is a greater chance the loan will not be repaid due to lack of income, death, or incapacitation.
  2. New Businesses – Banks typically want to lend to established businesses. Although they encourage business owners to apply for loans during their startup phase, they really prefer to work with companies that are at least two years old. Statistically, a large number of businesses don’t survive past their first year of business, so once you hit the two-year mark, traditional banks take you a bit more seriously.
  3. Industry-Specific – The type of business that you own and the industry that you fall under can be a deciding factor for many banks. In some cases, banks have chosen to reject loans solely based on a business’ industry.
  4. State-Approved Businesses – There are types of businesses that are authorized at the state level, yet lack legitimate state recognition. For example, cannabis shops or marijuana distributors are highly unlikely to receive a loan approval from a traditional bank.

Business Loan Denial Reasons

Traditional banks generally look at very matter-of-fact figures when analyzing whether to approve a small business loan. Here are some of the most common reasons banks give small business applicants the ax:

Credit History – A strong credit history is a non-negotiable to banks. Without a good personal and business credit score, your chances of securing a small business loan from a traditional bank go from small to virtually nonexistent. Banks will look into both your personal and business credit history. On average, banks like to see a personal credit score of 680-720 and a history of strong money management skills, such as effective management of the business budget and/or personal finances.

Losses on Tax Return – Showing profit is important in general, but it’s especially important for banks. In the beginning, many small businesses opt to maximize deductions. However, there is a high likelihood that a bank will reject a loan application if the small business doesn’t show a net profit.

Lack of Current Cash Flow – Banks fear that a business will focus on paying off expenses rather than paying off a loan, so lack of cash flow is a red flag. Banks tend to view a negative cash flow as a representation of a business’ health.

Insufficient Collateral – Traditional banks prefer to work with businesses that have collateral because if the business defaults on the loan, the bank can acquire the collateral and sell it to recoup the loss. This is another catch-22, though. On the one hand, banks require new small businesses to provide collateral when applying for business loans. The problem is that startups usually don’t have collateral such as vehicles, real estate, investments, or business equipment. If serving up your business or home as collateral scares you, there are many options to get a loan without collateral.

Customer Base – Banks like to grant loans to industries they consider stable. If they view your customers as a targeted niche, they may reject your loan application. Generally, they prefer to work with a business that has a diversified portfolio of clients.

The Solution

Ok, so you fall into one (or all) of the categories mentioned above. Does that mean you should give up, call it quits, and live off ramen for the rest of your life? Absolutely not. While traditional banks may make you feel like your business isn’t worthy of their trust, there are other options. Alternative lenders use data and technology to review your business health and approve loans instantly and online.

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


 

Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Go from rejected to approved on your next business loan application.  

Learning how to bounce back after being rejected from a small business loan is important for your business’ short and long-term success. Find out how – read this post from our partner Nav.com.

It’s amazing how one piece of paper can have the power to open doors to your dreams, or close right in front of you, holding you back from what might have been.

When you receive a business loan rejection letter, you may feel like the door of opportunity has slammed solidly shut. There’s not a sliver of light escaping around the edges. Whether you’re launching a new business, looking for a way out of a sales slump, or trying to jump-start an expansion idea, being turned down for a loan feels like you’ve reached a dead end.

Rejection Stings

Though it’s little comfort in the moment, know that you’re not the only small business owner receiving this bad news. Small business financing remains 17 percent below the peak reached prior to the 2008 recession, according to a report published in January by the Federal Reserve Bank of Cleveland. According to the Associated Press, rejection rates for black and hispanic business owners are around 20 and 19 percent, respectively, and business loan rejection for other segments rests around 14 percent.

Despite the sense of despair you may initially feel, being turned down for a loan doesn’t necessarily mean you’re trapped without options. A business loan rejection may simply be another challenge on the road to entrepreneurial success. By shoring up any weak areas in your operations now, you’ll set your business on stronger footing for the long run.

Small Business Owners Face Greater Challenges

Survey data suggests loan approval rates overall are generally increasing. But the beneficiaries of the loosened purse strings are primarily large and medium-sized businesses targeted by bigger financial institutions. The Federal Reserve Bank of Cleveland report shows small business lending (loans under $1 million) remains low. Some experts, like Karen Mills, former administrator for the SBA, believe this is because there’s more profit for banks managing larger loans.

Is Your Business A Good Candidate for Credit?

In order to improve your future chances at qualifying for a loan, it’s important to understand the reasons behind the rejection. When you apply for a loan, both your personal and business credit histories will be reviewed to determine your creditworthiness. If you or your business has little credit history or, worse, a poor credit history, your application is more likely to be rejected.

Does your business have a steady income stream? Does your cash flow statement show sufficient margin between payables and receivables? Small business owners who plan to apply for a loan in the near future should remember the importance of maximizing earnings and keeping expenses low.

If your business loan rejection is primarily due to an unfavorable credit rating, you’ll need to repair your credit before applying again. Check your credit report for erroneous information, develop a plan to pay down debt consistently and on time, and be sure to stay well below your available credit spending limits. Over time, these steps will help to improve your personal and business credit scores.

What’s Your Plan?

So you had a big idea in your head, but not necessarily well articulated in your loan application? That may have been your key mistake.

In absence of a solid business plan, a lender lacks sufficient information about how you intend to use your financing to form an educated opinion about the viability of your goals. This lack of information can lead to a business loan rejection, even if your credit rating and other financials are in great shape.

Your subjective, romantic vision of a forward thinking business might gain you attention at a cocktail party, but it doesn’t show lenders any evidence of your repayment ability. Hand sketches on napkins or a couple of articles torn from a trade magazine aren’t substantial evidence of your calculated risk, projected timeline, knowledge of competition and market, and so on.

A well-formed, professional business plan is essential in demonstrating your own understanding of your business potential. In addition to a mission and vision, business model, and marketing strategy, your business plan should include a thoughtful forecast of your earnings potential and an expected break even point to demonstrate your clear understanding of what it will take to make your business financially viable.

What’s Next After Business Loan Rejection?

Like an athlete rallying back from a disappointing showing at last year’s competition, you need to take some time to assess and prepare before furthering your search for funding.

First, evaluate your business credit reports. Look for errors, address old or dormant accounts, and confirm timely payment. Next, improve your cash flow by reconciling past due amounts, minimizing spending, and maximizing sales. Build up a reserve that banks will look on favorably as a means of possible repayment.

If writing and Excel aren’t your thing, work with a friend or relative who can help turn your vision into an articulate plan documented with numbers and data. Consider ways to strengthen your relationship with a local lender or credit union, and contact your local Small Business Development Center for some hands-on advice.

Your recent business loan rejection may have closed one door, but that doesn’t mean there aren’t open windows nearby. With your hard work, you’ll be sailing through to the other side in no time, moving fast toward realizing your small business dreams.

 

This article originally appeared on Nav.com and was re-purposed with their permission.


 

Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

William and Isabel Delgado took over their garage after a bad business partnership and are transforming it into their own business with a little help from a small business loan from Opportunity Fund.

Our customers inspire us every day and we want to regularly share those stories to inspire you, too. This week, read about how William and Isabel Delgado took over their garage after a bad business partnership and are now transforming it into their own business. The Delgados are a little closer to their dream thanks to a small business loan from Opportunity Fund.

A Broken Business Partnership

William and Isabel’s road to business ownership was a rough one.  They turned to a business partner to help them start Mechanic Zamer in Santa Ana. As immigrants, the Delgados didn’t understand how to get permits and licenses for their business.

Their partner handled that part of the business, but ended up shutting the Delgados out of the ownership.  Despite working to make their garage successful with William as the mechanic and Isabel the business administrator, they had no claim to the business as everything was under their partner’s name—including all the business revenues.

The partnership got even worse when their partner ran up nearly $60,000 in debt and even tried selling the business without telling the Delgados. They needed a quick fix to get their business back on track after the broken partnership.

Repairing the Business

The Delgados had to assume the entire debt left by their partner to take over the business.  Isabel used her ITIN number to start the business as their own, and soon Mechanic Zamer was a little closer to belonging to the Delgados.

Opportunity Fund loan consultant Osbaldo Velasquez reached out to Mechanic Zamer and offered a $2,600 loan to help with the costs of taking over the business.  They used the loan to pay off balances from their assumed debt and to boost cash flow.

Mechanic Zamer - ROF Industries

Isabel Delgado (left) got her business going thanks to help from Opportunity Fund loan consultant Osbaldo Velazquez (photo courtesy of ROF Industries)

Isabel is thankful for their chance to build Mechanic Zamer as truly her own business with her husband, and the Opportunity Fund partnership helps them build good credit.  They can also rely on a trustworthy lender, which means the world to them especially after their rough business partnership. Osbaldo truly went the distance to help his borrowers, even providing driving directions to the Delgados on the day they came into our Southern California office to sign their loan documents.

We’re happy to help the Delgados succeed and we’ll be there when they need us again.

We hope this story has inspired you, too.  At Opportunity Fund, we offer easy-to-get, fast, and affordable small business loans to help small business owners succeed.  Visit our home page to find out more.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

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Each month, we’re sharing and promoting free or affordable events that help small business owners run their businesses better. This is your monthly calendar for in-person and virtual events in Northern and Southern California. Here are the best upcoming events in June.

Each month, we’re sharing and promoting the free or affordable events that help small business owners run their businesses better. This is your monthly calendar for in-person and virtual events in Northern and Southern California. Here are the best upcoming events in June.

Northern California/Bay Area

Choosing a Retirement Solution for Your Small Business

Date: June 9, 2016 | 1:30 pm PDT – 3:00 pm PDT

Location: San Francisco SBA Entrepreneur Center
455 Market Street, Suite 600, San Francisco, CA 94105 (map it)

Contact: San Francisco SBA Entrepreneur Center sfomail@sba.gov

Organization: SBA San Francisco District Office and U.S. Department of Labor

Fee: Free

A representative from the U.S. Department of Labor, Employee Benefits Security Administration (EBSA) will provide a presentation focused on choosing a retirement solution for your small business. Click here to register for this event.

Starting And Running A Successful Food Truck Business

Date: June 15, 2016 | 1:00 pm PDT – 4:00 pm PDT

Location: 300 Ellinwood Way Fl 2, Pleasant Hill CA 94523-4859 – Bodega Room (map it)

Contact: Oscar Dominguez (925) 602-6806 or odominguez@ehsd.cccounty.us

Organization: Contra Costa County SBDC

Fee: Free

The food truck industry is a booming with new opportunities for people who are eager to be successful entrepreneurs. You will learn to identify the perfect niche and customer base; create menu items that save time, money and space in the kitchen; find a profitable location time and time again; manage daily operations, costs and prices; and consider licenses, codes, regulations, parking, etc. From choosing a vehicle to franchising and everything in between, learn what you need to know to get your business moving toward success.

Click here to register for this event.

Access to Capital / Lender’s Fair

[Author’s note: this event, originally scheduled for June 22, has been postponed to September 21. Check back with us for the September events lineup for more information.]

Date: June 22, 2016 | 8:00 am PDT – 4:00 pm PDT

Location: College of San Mateo, 1700 West Hillsdale Blvd., College Center Building 10, Bayview Dining Room, San Mateo, CA 94402 (map it)

Contact: Robert Shoffner (650) 574-6402

Organization: San Mateo SBDC

Fee: $20

Small business owners are invited to participate in this dynamic workshop focused on small business credit needs that will include remarks from Elizabeth Laderman, Senior Economic Outreach Economist from the San Francisco Federal Reserve, and Mark Quinn, Director of the SBA San Francisco District Office.

In addition, there will be four panel discussions on “Traditional Sources of Capital”, “Emerging and Alternative Sources of Capital”, “Global Access: Export Financing and Services” and “Pre-IPO Funding, Seed Capital, Angel Investors, Venture Capital and Growth Equity”. Throughout the day there will be a resource fair where attendees will be able to interface with resource providers regarding products and services. The workshop represents an excellent opportunity to meet resource partners and lenders that may be able to provide you with the capital to grow you business, invest in capital equipment or hire new employees.

Click here to register for this event.

Southern California

Basics of Accounting – The Language of Business

Date: June 7, 2016 | 9:00 am PDT – 12:00 pm PDT

Location: National University
3390 Harbor Blvd., Costa Mesa, CA 92626 (map it)

Contact/Organization: Orange County SCORE workshops@score114.org

Fee: $35 via online registration by June 6/$45 at the door – Pre-registration recommended

Accounting is the “language of business”. People in the business world—owners, managers, bankers, investors—use accounting terms and concepts to describe the events that make up the “story” of a business. At its most fundamental level, accounting is the system of tracking the income, expenses, assets and liabilities of your business. In this workshop, you will learn how to make journal entries for debits and credits, the structure of financial statements, important financial ratios, ledgers, and, most importantly, how to “account” for the transactions in your business.

Click here to register for this event.

Small Business Resource Expo

Date: June 22, 2016 | 12:00 pm – 4:00 pm PDT

Location: City of Los Angeles Friendship Auditorium
3201 Riverside Drive, Los Angeles, CA 90027 (map it)

Contact/Organization: Los Angeles Alliance for Economic Inclusion

Fee: Free

Entrepreneurs are invited to attend this no-cost Small Business Resource Expo to connect with organizations that assist small business owners. Connect with nonprofit and government agencies specializing in small business resources such as technical assistance and training, business plan development, financing, procurement, mentoring and more. Opportunity Fund Regional Director Iosefa  Alofaituli is scheduled to attend. Registration closes June 18, 2016 at 8:00 pm PDT.

Click here to register for this event.

Virtual

California Small Business Insurance Requirements Webinar

Date: June 20, 2016 2:00 pm – 3:00 pm PDT
Registration Deadline: June 16, 2016 | 6:00 AM PDT

Location: Online – Webinar

Contact: Catrina Avila (916) 527-8400

Organization: Veterans Business Outreach Program

Fee: Free

Learn about the insurance requirements when owning a business. California law mandates employers to have certain types of insurance: workers’ compensation, unemployment, and contingent on the business location, disability insurance. Click here to register for this event.

A live workshop on the same topic of insurance requirements for small business owners is also available in Sacramento on June 20, 2016 at 2:00 pm PDT. Click here for more information.

Don’t Let These Events Send Your Business into a Tailspin

Date: June 21, 2016 | 11:00 am – 12:00 pm PDT

Location: Online – Webinar

Organization: SCORE Association

Fee: Free

Although “disaster preparedness” often triggers images of hurricanes, tornadoes, and floods, there are dozens of “disasters” that have nothing to do with weather which can send your business into a tail spin. But If you have a plan for dealing with them, you can reduce their impact. Are you prepared to carry on if a key employee unexpectedly quits? Or inventory you need to fulfill orders is suddenly unavailable? Or your city block experiences a power outage or lengthy interruption to your internet service? These kinds of events are more commonplace than most business owners realize, but with advance planning the repercussions on your operations, revenues and customers can be minimized.

Click here to register for this event.

We’re looking for upcoming events to promote to small business owners like you. If you have an event you’d like to share with fellow business owners, contact us at sblending@opportunityfund.org.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Opportunity Fund. Working Capital for Working People. opportunityfund.org