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Community Manager

Office Hours to discuss "Getting Your Business the Money It Needs"

As part of our #OpenWeStand initiative, please join the Next Street and GoDaddy teams to ask questions and hear about how to get your business the money you need right now. We’ll be  available here on Tuesday, July 21st from 12pm-1pm Pacific Time to answer your questions and share information. So please join us! #OpenWeStand

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.
61 REPLIES 61
Community Manager

I just found out that I got rejected for a loan. How do lenders figure out if I'm eligible or not for a loan? It's very confusing to me.

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.

Lenders consider several factors to determine loan eligibility. These include but are not limited to:

  • Credit History (Personal & Business
  • Business Financials (Core Financial Statements/Tax returns)
  • Capacity to repay debt
  • Past Debt
  • Future Projections
  • Collateral
  • Capital Injection (Owner’s investment contribution into the business)
  • Use of loan Funds

 

We recommend that you have a clear understanding for the use of funds to your business (amount needed, purpose, and benefit) prior to seeking financing.

Small Business Expert
Community Manager

How much does my personal credit history factor into whether or not a lender will give me a loan? 

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.

Personal credit history matters! It is one of several important factors that impacts a lender's decision to provide funding.

 

Lenders can deny an application for any number of reasons related to your personal credit history, including:

  • poor personal credit score
  • delinquent accounts
  • previous bankruptcies, foreclosures, tax liens, etc.

If you have any of these in your credit history, we recommend having an conversation about your personal credit history with your lending institution or local SBDC. They will help you understand how your personal credit may impact your ability to access business funding prior to moving forward with any applications. They will also be able to help you decide if it is the right time to continue to seek financing based on your credit history, or if you should pursue other funding options. 

Small Business Expert
Super User II Super User II
Super User II

Given an environment where there seems to be little rhyme or reason as to which companies or individuals acctually receive funding, what do you advise for those who get approval for funding? Should you and/or your business make known that you have secured financial compensation?

 

I have seen people caught up in a frenzy of questions and requests should they disclose. I have also seen a huge backlash for those companies who are publicly outed as having received financial benefit.

 

...turns out that my two cents is worth less or more depending on the current exchange rate.

roy darling *my posts seem a lot shorter in my head

Next Street Team

Hi @rd  – As a private entity, it is at your discretion to decide whether or not to disclosure received funding.  While most small businesses do not normally share their ability to access capital broadly, it will ultimately be up to you as a business owner to decide whether to disclosure to relevant parties. 

Small Business Expert
Super User II

Can you let us know what type of information and paperwork we should have at the ready to make sure the process goes smoothly and to avoid unnecessary delays?  Thank you!

Judith
"I never lose. Either I win or I learn." ~ Me

Hey Muse! We put together a table to overview the necessary documents for the various funding sources. Check it out below!

 

table.png

Small Business Expert

Is there a zoom link for us to join for the Q&A session?

Welcome! There is no Zoom. Instead, we will be responding to questions for you here. So, if you have questions, please add them here.

Small Business Expert

HI @DevelopingNoire! There's not a Zoom link but feel free to add questions that you have. Thanks much!

Rachel

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.
Community Manager

How often should I be updating my financial statements? 

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.
Next Street Team

It really depends on your business.  However, we recommend monthly.

Small Business Expert

At least monthly!  Good rule of thumb is the shorter your sales cycle, the more frequent you should be updating your books.  The key is to get into a good routine to help ensure long term success

Small Business Expert

We recommend updating and reviewing your financials at least monthly! But ultimately, you should be reviewing your financials as often as necessary to have a solid understanding of the financial health of your business.

Small Business Expert

As a winery that is just starting up I need a good size amount of startup capital to cover the lease and salaries for the first few years. With licensing and building up I won't be profitable in the first year. Once things start to roll I should be able to pay back the loan fairly quickly in the years to follow.
Is there a financing option you would recommend that allows for a delayed start repayment? Or should I just plan the first year's loan payments to come out the total loan?
WildWinery.org

Hi @WildWinery  - Congratulations on starting this amazing opportunity.  We've worked with many CDFIs (alternative, mission driven organizations) who have been able to provide funding to start up businesses in your same position.  Here are some key questions worth considering:  Do I have outside income that can cover the debt for the first year?  How realistic are my current projections?  Do I have collateral that might make my request more appealing?  I strongly consider also looking into friends and family for early stage investment  opportunities.  The road to acquiring funding as a new business is by no means easy but hoping these suggestions help!

Small Business Expert

My business has a few alternative revenue streams with various side products such as Wild Hickory Syrup, but depending on the size of the loan it wouldn't be able to cover large monthly payments.
My protections are fairly solid, especially when everyone who samples the wine falls in love with one of our many flavors. Which makes it all the frustrating to not be able to start selling immediately.
At this point the only collateral the business has is large quantities of stored wine ready for tastings. Is this or future productions a viable collateral?
I plan on tapping into friends and family with a crowd funding campaign at some point, but I'm waiting to launch until I know there's a large enough base. And for the large funding to be ready with it.
Do you know of any angel or equity funders looking to fund a growing wild winery in Michigan?
Or would you recommend combining crowd funding with a bank loan?

Alternative revenue streams will for sure help your case @WildWinery.  However, lenders may be hesitant to use wine/future proceeds as collateral.  I think you're on the right path by engaging friends and family.  Your business plan will be essential for next steps.  Lenders and Investors will both need to clearly understand the company's growth goals and it's path to profitability.   I'd still encourage you to pursue traditional debt funding and crowdfunding options but, to your point, equity funding might be worth pursuing.  Unfortunately, there is no one central source available that specifies potential equity partners for interested parties.  Here's my suggestion:  Tap into your business networks.  Many times, colleagues, vendors, and clients in the same space might just have the connections you're looking for.    

Small Business Expert
Community Manager

Can I choose to accept or decline after I'm approved for a loan? If I decline, will it hurt my credit score or chances for another loan in the future? 

RachelM - GoDaddy | Community Manager | 24/7 support available at x.co/247support | Remember to choose a solution and give kudos.