The Female Business Owner’s Modern Approach to Banking
Vice President and Project Manager, Risk Management of Union Bank, N.A., April Bradley, presents financial tips for the female business owner in today’s economy.
Lesbian entrepreneurs often ask if banks are still lending to women business owners. The answer is yes, many banks are still lending to viable candidates who demonstrate financial soundness.
Compiling materials and documents to help demonstrate and underscore your business accomplishments is a smart first step in seeking a loan. Providing your lender with insight into your ability to successfully execute your business strategy and accomplish your goals may help position you more favorably for loan consideration.
Below are some suggestions to help you prepare:
Credit score:Many lenders examine credit risk by reviewing your FICO score, a credit score based on a mathematical formula developed by Fair Isaac and Company. According to the Small Business Administration (SBA), when you are starting a business, your personal credit is often used by lenders and suppliers to determine your terms of credit. In other words, your business credit is built upon your personal credit. Therefore, you may wish to check your personal credit report and make sure it is accurate; correct any discrepancies immediately. You are entitled to a free credit report annually.
Lesbian entrepreneurs should note that in the few states where LGBT couples can legally marry, spouses may be responsible for each others’ debt. Also, if you and your spouse are applying for any type of loan together, you will probably need to present individual credit reports.
In addition, women entrepreneurs may wish to make sure their business credit report is accurate before submitting a loan application. To secure copies of your business credit report, contact one of the business credit reporting agencies.
Positive cash flow documents:Financial records are a critical part of the loan process. If you are seeking a loan for an existing business, providing records demonstrating a history of positive cash flow can lend weight to your perceived ability to cover your business-related costs and repay your loan. For women entrepreneurs starting a new business, providing a record of positive earnings from a previous business or a business you operated in the same industry, may also be beneficial. Keep in mind that providing an accurate, realistic and thorough portrayal of how you will achieve positive cash flow in the future is also key.
Details about industry expertise and successes:As part of a loan application, it may be helpful to provide details about your relevant industry expertise as well as tangible successes attained while owning or operating a business in your chosen field. Prior successes may include increased revenue growth, business expansion and securing new projects and/or clients. Your management team is also integral to your business’ success. Therefore, providing a track record of your team’s expertise and industry successes may help boost confidence in your ability to compete in your market sector.
Records of successful loan repayments:If you have successfully repaid a prior business or personal loan, providing these bank records may also help demonstrate your ability to repay your debts.
Take the time to gather documents to help highlight your prior successes, keep thorough records and address any challenges that may hinder your loan application process. Banks are still lending.
The foregoing article is intended to provide general information about business lending and is not considered financial or tax advice from Union Bank. Please consult your financial advisor.
April Bradley is a Vice President and Project Manager in Risk Management for Union Bank in Los Angeles, California. Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of .7 billion at December 31, 2011. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operated 414 branches in California, Washington, Oregon, Texas and New York, as well as two international offices, on December 31, 2011. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world’s largest financial organizations.