Rock-bottom commercial real estate and equipment values mean only one thing… Your collateral is worth a whole heck of a lot less than before.
Maybe you’ve had the experience of being turned-down for a business loan recently because your ets aren’t worth enough to secure business financing. In fact, even companies with rock-solid cash-flow are getting the shaft by banks.
If you just started – or are thinking about starting – a business, you have an even bigger challenge ahead. The days of easy credit for new businesses with little more than a dream and a wish are over.
In fact, here’s what Federal Reserve Chairman Ben Bernanke had to say in Washington, D.C. on July 12, 2010, "The formation and growth of small businesses depends critically on access to credit. Unfortunately, those businesses report that credit conditions remain very difficult."
Namely: fat-cat government bureaucrats would watch their every move. Even banks that followed the rules and played it safe were suddenly forced to turn-down otherwise-good applicants because they didn’t look quite "good enough" on paper.
When you need business credit to fulfill contracts with clients, advertise your business, invest in new equipment, secure big business deals and open more locations (like most small businesses), following information from 2008 = 90% chance of failure.
With my personal credit cards maxed-out and my savings wiped-out, I still needed more money to build my business.
Because I used my personal credit cards to finance everything, my business had zero credit history of its own.
And to make matters worse, because my personal credit cards were maxed-out, no bank would give me another credit card.
My business went from being “stuck” without enough capital to grow and advertise… To being wiped off the map after a couple setbacks I vowed "would never happen to me."
I didn’t plan for the “what if’s.” What’s worse – I didn’t have a credit safety-net to keep my business running and push forward when disaster struck.
Suddenly, I found myself without my business, holding onto a steaming bag of credit card debt. With little income, I couldn’t make the minimum payments and my credit score dropped like a lead rock to 495.
“The people who get on in this world are the people who get up and look for the cir stances they want, and, if they can’t find them, make them.”
Because no matter the economy…. no matter your industry… and no matter your cir stances, there’s always others with similar (or worse) challenges who push forward and prosper in spite of them.
And, in 18 short months, I raised my personal credit score 150+ points and built a successful new business, because I realized I had two choices…