How do you get financing to launch a business consulting company or maintain an existing one? Well, that's exactly what we're gonna talk about during today's training.
Topics to Discuss
Everything you need to know to get money for a business consulting company
What lenders look at to determine if you should be approved or denied
The three C's cash acquisition formula
How you can know within seconds the type of financing you can get approved for
The type of business credit reports and other information lenders are looking at to make all kinds of decisions about you
What you can do to improve these aspects to be able to get more money and better terms
We got a lot to cover. So let's dive in
If you're looking to start a business consulting company or expand and grow a current one, then you already know that you're going to need capital to do so. So how do you get money as a business consulting business?
Cash Acquisition Formula
Well, ultimately, there's three ways to do it. I call this the three C's, cash acquisition formula. It's really simple to learn, and once you learn it, you'll know exactly the type of financing you can get approved for. With the three C's cash acquisition formula, there's three different ways that lenders are typically going to give you money.
Collateral
The first is based on collateral. So any kind of collateral you may have in your business or outside of your business can potentially be used to qualify you for financing. For example on the personal side, if you have stocks and bonds, you could borrow as much as 90% of the value of those stocks and bonds and get a loan or credit line as low as 5% interest.
One benefit is it doesn't even have to be your stocks and bonds. You could tap into somebody else around you like a family member, a friend, or potential investor. The best part is that you still earn interest on those stocks and bonds while you're leveraging them to get the money you need to start and grow the business.
You can do the same thing with 401(k)s and IRAs as well. As a matter of fact, you can borrow as much as 100% of the value of a 401k or IRA to launch or maintain your existing business consulting business.
Now, that being said, there's other kind of assets that can be pledged as collateral as well. If you're in business consulting, one of the most common things you could tap into is what's called "AR financing" or account receivable financing.
Account Receivable financing allows your payments from your customers to be used to pay you on turns. Essentially, they're paying you on terms as collateral to be able to get financing. The nice thing is you can get interest rates lower than 1.5%.
For Account Receivable Financing, personal credit and cash flow doesn't matter. As long as you have receivables from customers that owe you money, you can leverage those in order to get financing.
Now do you have commercial real estate? Do you have residential real estate, commercial vehicles, inventory, equipment? There's all types of assets that can typically be pledged as collateral for asset based financing. Though the most common ones you're going to run into when you have business consulting has to do with stocks bonds, 401k, IRAs, or account receivables.
Credit | Credit Line Hybrid
Not a second "C" of this three C formula is credit. If you have good personal credit, a lot of financing opens up for you. This includes a program called credit line hybrid. Now with the credit line hybrid, you can get approved for as much as $150,000 even as a brand new business. It's no doc financing. You don't need tax returns, bank statements, or any type of income docs to get approved because it's stated income. You get 0% rates for up to 18 months.
Whether you're making major acquisitions, deploying major marketing campaigns, or even getting your business off the ground, you can tap in and pull the cash out of these credit lines at 0%. You can also use a Credit Line Hybrid for any type of expense that you can't use a typical credit line for. Also, it's typically easy to get approved. Since it's unsecured, you don't need collateral and you don't need cash flow. All you need is good personal credit.
Requirements | Credit Line Hybrid
Now typically, you should have a 680-700 or higher FICO score on the consumer side in order to get approved. If you don't have that you could tap into that of a guarantor. So again, a family member, a friend, a potential investor, you can use their personal credit in order to qualify for Credit Line Hybrid.
A Credit Line Hybrid is also a great way to build your business credit. By building business credit, you can get all kinds of other kinds of credit without a personal guarantee and without a personal credit check. However you've got to establish a business credit profile and the easiest way to do that is using a program like credit line hybrid with a credit lines report to the business credit reporting agencies helping you establish that profile and score and helping you get very high future credit limit accounts without a personal guarantee and credit check. So a credit line hybrid is a great way to get money to launch or to maintain your business just based on personal credit.
Cashflow
The third C is cashflow. Once your business is generating six months worth of consistent cashflow, there's all kinds of other financing that becomes available. Like the other aspects of the three C's formula, if you have cash flow, you don't need the other C's. You don't need to have good personal credit and you don't need collateral if you have a consistent cash flow to qualify for financing,
Merchant cash advances, term loans, cash flow financing, as well as all kinds of credit lines become available just with six months worth of consistent revenue. Fundbox & Bluevine offer great credit lines in the space. Also, PayPal, Square, and Stripe have good offers if you're using those methods to accept payments from your customers.
That's the three C's cash acquisition formula. You have to look at where your strength is. Whether it's cash flow, credit or collateral, you can get financing just based on having one of those strengths. The more strengths you have, the better the financing you can qualify for.
For example you can get an SBA loan, which is really what all business owners want to basically grow into qualifying for. By having all three of 3 C's -- having cash flow that's consistent and verifiable with tax returns & bank statements, by having good personal and business credit, and by having collateral to offset the lender's risk -- you can qualify for SBA loans. SBA loans are long term and come with low interest rates. So remember, if you have all the C's, you're able to qualify for that kind of financing.
Yet even with one of the C's, you could still qualify for financing. What if you have bad personal credit, you don't have cash flow, and you don't have any kind of collateral? Well, that's when business credit could really be your savior. This is because with business credit, you can start getting all kinds of high limit business credit cards, and rather quickly. You'll start off with vendor accounts at places like for example Quill.
From vendor accounts, you then go on to retail store credit at places like Office Depot, Staples, Best Buy, and the kind of places that sell all the equipment, office furniture, and everything you're going to need to run your business. From there, you'll graduate to be able to qualify for fleet credit where you can fuel vehicles, repair & maintain vehicles as well as you can get auto financing. Also you can even get a Visa card, MasterCard, and bank credit, all without a personal guarantee and without a personal credit check, regardless of cashflow creditor class.
So make sure you think about business credit. It is a great way to fund your business even if you can qualify for other kinds of financing. By establishing your business credit, it is going to help you get more money at better terms.
Call To Action
So how do you tap into all this? When you give us a call for a Free Consultation, there's three things we're going to do for you. First, we're actually going to do a Fundibility Assessment.
We're going to look at the exact things that lenders and credit issuers look at to determine what you need to fix to help you radically improve your chances of getting approved. We're also going to help you get your business credit reports with Dun & Bradstreet, Equifax, and Experian. We provide you tips and tactics to initially establish your business credit or continue to grow it if it's already established.
Also, we're going to do a Funding Qualification we're going to talk to you about all kinds of funding that your business specifically can get right now. All of that happens on a free consultation. So click the link to get started or RSVP to the free webinar below to get started.
We'll help you:
get your business credit reports at no cost
give you tips and tactics to build your business credit
improve your fundibility
We do this so you have the best chance of getting approved, for the most money, at the best terms!
FREE Training
So if you want to talk about the best path to get money for your business and access our Fundibility Mini Course that outlines fundibility, our Free Finance Assessment, and even our guide on 50 Credit Lines & Loans You Can Get NOW, make sure you check out the link below.
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