How does an entity apply for and obtain business loans and create a good credit rating?
In this audio snippet, you'll hear about:
- Pay your bills on time!
- Small business loans and bank loans available
- Typically banks will only lend money if you have assets to leverage or audited financials
- It comes back to having a good relationship with a banker
Audio Transcript
Travis:
How does an entity, once they've established
their bank account and their accounting systems, and they are ready to
move forward with their business, how does an entity apply and obtain
business loans and create a good credit rating?
Yosef:
Well, the conventional answer is to pay your bills on time.
Travis:
[laughs] Is it as simple as that?
Yosef:
No.
Travis:
I didn't think so.
Yosef:
It's at least a good start.
Travis:
[laughs]
Yosef:
Getting business loans is going to depend on a lot of things. There are
small business loans available. There are bank loans available.
Typically banks will only lend money if they can secure a loan against
some personal assets, or if it is a strong business then you have
either reviewed or audited financial statements, then they will issue a
loan to you as well.
To give you any more specific direction... Again, this comes back to having an established relationship with a banker.
Travis:
Right.
Yosef:
And a good banker. I think there are actually ethical issues with me
trying to provide direction for a client, how to get appropriate
financing.
Travis:
Fair enough.
Yosef:
Frequently, a number of other CPA's or attorneys will actually get kickbacks.
Travis:
Oh wow!
Yosef:
I mean, they are legally entitled to, I just don't believe in that personally.
Travis:
OK.
Yosef:
I don't think I'm serving my clients appropriately by having a vested
interest in the course of financing or investing that they choose, but
other CPA's have different outlooks.
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