Blue Button Strategies

Here’s our recommended strategies while you are waiting for the infamous “BLUE BUTTON” to become functional on the SBA portal for your EIDL Increase request:

Manage your anxiety. Schedule TWICE daily check-ins, once in the morning, the second in the evening.  The money’s not going anywhere, it’s not running out, and you’re not going to miss a “place in line” with millions of other EIDL applicants if you don’t submit your request within a few hours.  You can wait the day. Doing so will reduce your stress.  When you feel yourself getting stressed about not checking the BLUE BUTTON every three minutes, do the following mundane, boring, functional stuff instead:

PREPARE.  We’ve seen SBA coming back recently and requesting additional documents for the EIDL Increase requests.  YES, it’s true, we’ve seen some requests were automatically approved.  That’s the BEST CASE, obviously. Don’t assume the “BEST CASE” scenario; assume the worst case and PREPARE for the SBA request.  Here’s a list of documents we’ve seen SBA requesting to approve the EIDL Increase.  One important note: don’t assume SBA already has your documents from the list below. If they ask for it, submit it again, in an updated form (current date for your signature instead of a date from two months ago, for example).

LIST:

  • 2018 and 2019 COMPLETE Federal tax returns
  • Driver’s License: COLOR legible PDF scan front and back. If the image is blurry, do it again until it is CRYSTAL CLEAR
  • VOIDED check for the destination bank account to deposit your funds. BE SURE this is the SAME account you entered on your original EIDL application. BE SURE you don’t reverse the ROUTING number for the ACCOUNT number. Yes, we’ve seen people do that!
  • SBA Form 2202. THIS is IMPORTANT.  Have a form that is current because SBA wants to confirm if you have incurred any other debt in the name of the business entity since you applied, including existing EIDL and PPP loans or other types of financing. Remember: ONLY business debt in the name of an business entity; personal debt does not go on this form. EIDL and PPP go on the form no matter whether you are an entity or a Sole Proprietor.
  • Business Plan and Revenue Projections for 2021.  See our BLOG post about how to prepare.

Here’s what we’ve experienced at Aurora Consulting in our two plus years of assisting Small Business Owners to obtain financing, including the EIDL COVID-19 loans and PPP loans:

  1. Small Business Owners don’t want to be bothered with the basic building blocks that are boring
  2. They don’t want to take the boring time to write boring business plans
  3. They don’t want to take on the mundane task of doing some basic fifth grade math to calculate income and expenses
  4. They don’t want to bore themselves to tears by spending time organizing basic documents into a neat and orderly and presentable fashion

Maybe YOU are NOT in this bucket. GOOD.

Much of what we do at Aurora Consulting is to shepherd our clients through these basic and boring tasks.  Here’s the problem: BORING leads to financing success.

Eliminate your stress about the BLUE BUTTON by BORING yourself.  It’s much simpler than you think.

Planning and Projections for Your EIDL Loan

The request for a business plan can pop up at any time. We saw this before and during COVID. 
SBA was asking many EIDL applicants for Business Plans and Revenue Projections. Frankly, this is something you should have AT ALL TIMES if you consider yourself a Small Business Owner, even if you’re a “gig economy” Schedule-C Sole Proprietor. You can’t truly measure your success without a plan.

When Trevor was a 100% commissioned Loan Officer at a Mortgage Banking company, he had a 22 page Business Plan with Revenue Projections, and he was an EMPLOYEE.

We put together a list of questions for our clients so we can prepare the necessary information for their SBA EIDL applications.

We’ve developed questions to assist in preparing a 2021 Business Plan Summary and Revenue Projection:
SBA recently is asking many EIDL applicants for Business Plans and Revenue Projections. Frankly, this is something you should have AT ALL TIMES if you consider yourself a Small Business Owner, even if you’re a “gig economy” Schedule-C Sole Proprietor. You can’t truly measure your success without a plan.

When Trevor was a 100% commissioned Loan Officer at a Mortgage Banking company, he had a 22 page Business Plan with Revenue Projections, and he was an EMPLOYEE.

We put together a list of questions for our clients so we can prepare the necessary information for their SBA EIDL applications.

We are happy to share it with you here. Wishing you all SUCCESS in everything you DO!

We’ve developed questions to assist in preparing a 2021 Business Plan Summary and Revenue Projection:

QUESTIONS

  • What actions did you take in MARCH 2020 to adjust or “pivot” your business to survive the COVID-19 pandemic?
  • How did those actions help: have you maintained a steady flow of business, did your business decline?
  • Are you continuing those actions into 2021?
  • Have you originated new business concepts to continue your business productivity into 2021?
  • If yes, what are these new concepts?
  • How will the EIDL program assist you to maintain the continuity of your business?
  • How will the EIDL program assist you to support the “pivot” concepts you’ve created?
  • IF you never created any “pivot” concepts, would the EIDL program assist you/encourage you to do that? How?

REVENUE

  • What is the percentage decline in 2020 to your Gross Revenue from 2019?
  • What is the percentage decline in 2020 to your NET INCOME from 2019?
  • If your net income is lower, is that due to the pandemic? If so, how?
  • Without EIDL assistance, what do you anticipate to be your Gross Revenue in 2021 for EACH QUARTER?
  • With EIDL assistance, what do you project to be your Gross Revenue in 2021 for EACH QUARTER?
  • Will you incur new, different expenses in 2021 than you’ve had in 2019?
  • If so, what specific expenses and how much in dollars?

If you want more information about untangling how a business plan works, especially for financing purposes, click below for our business plan outline guide.

If any of our videos or blogs have been helpful, useful and productive, please leave us a positive review on our GOOGLE PAGE. It helps other business owners seeking vital SBA information for their business, not to mention, it’s a kind exchange of information.

PROACTIVE & PREPARED   Get a simple, easy to follow guideline on what you can include in your business plan to keep you focused on growing your business.

Tax Refund vs. Eligible Income

With Tax Time soon approaching, we feel obligated to remind you of our continued advice about the best methods to prepare your tax returns if you plan on applying for Business Financing in the future.

With Trevor’s 30 years as a Mortgage Loan Officer, he saw this time and time again. While the tax professionals and CPAs might do a marvelous job of getting a Self-Employed Business Owner a GIANT REFUND (or simply lowering the tax bill) these folks never seem to have a discussion with their clients about the long term ramifications of such deductions/lowered income.

The “look back” period to qualify for a mortgage is 2 years; for a business loan of any type, it’s 3 years. That means the Lender will take those “Bottom line” numbers and average them for the time period in question (2 or 3 years) and create a qualifying income. When Schedule C shows a loss or minimal income over the time period, well, do the math. It ain’t pretty.

For a Self-Employed Borrower with a Schedule C (including many LLCs), lowering the net income on Line 31 by deducting oodles of expenses lowers the potential loan. IRS does not “require” anyone to deduct expenses; this is an “option” which helps to lower tax liability. BUT it also reduces a Borrower loan qualification by lowering income.

Whenever you complete a tax return you don’t have to deduct expenses! This feature of a tax return allows you to lower your tax liability.

BUT IT ALSO LOWERS YOUR INCOME.

And for any Loan you may request in future (up to three years later) the Lender will use that bottom line income to calculate your qualifications.
Take extreme care and think long term strategically before making a final decision on a tax return.

Be sure to watch our YouTube video about the “LOOK BACK” period!

Small Business Must Roll the Dice

This comment in an online forum about SBA EIDL loans says it all about two key concepts:

“…who knows what this winter is gonna be like here so I’m afraid to give it back yet.”

The business owner has EIDL monies left over and had considered (oh so briefly) prepaying the loan with the remainder of the monies. And then the new surge hit.

Concept #1: Utilization of EIDL monies as a way to replace lost revenue for working capital due to the COVID-19 pandemic. There is no finish line; no concrete timeline; complete uncertainty.

If you have not used all your EIDL monies, we recommend holding on to the funds through the coming months. You want to have a better understanding of a “diminishment” of the COVID-19 pandemic to such a level that there’s no fear of upcoming possible lockdowns where you have to close your business. Likewise, to know there’s no upcoming lockdowns to gauge if you will have customers coming through the door.

Concept #2: “who knows what this winter is gonna be like…” speaks to the SBA’s continuing failure to recognize the drastic difference of this disaster from all “traditional” natural disasters. The EIDL processing guidelines and the Loan Agreement and the lack of clear, unambiguous guidance on how to use the monies from and EIDL all need to be addressed by the Administrators of SBA.

We’re eight months into this pandemic; that’s more than enough time for this Federal Agency to have created at the very least some better guidance on how to use the monies beyond stating, “Working capital” in the Loan Agreement.

Business owners are terrified to use the funds incorrectly, many of them saying, “I don’t want to go to jail!” This is absurd.

SBA! Please, please, please, we are begging your Administration, recognize the unique features of the COVID-19 pandemic disaster and modify your guidance for EIDL funds so that business owners can use the money without fear of contravening the terms of their Loan Agreements!

We’re all holding on out here for this disaster to end. We’re all holding on out here, trying to survive and keep our business’ doors open. We’re all holding on for more detail from SBA and a resiliency to the fact this disaster is like no other disaster in American history.

Old News on EIDL LOANS

Linda Rey manages the marketing for our business financing practice. She recently posted relevant information on Reddit about our recent experiences with EIDL loans, both new applications and the Reconsideration process. A troll responded with, “Old news.”

COVID-19 is ongoing with no definitive end point in sight.

“Old news” doesn’t describe the continuing inquiries we receive from anxious business owners. A quick scan of any relevant online forum about EIDL programs reveals the simple truth: business owners still struggle with EIDL loans they’ve obtained (utilization) and fighting for monies they need to survive.

The U.S. Congress and the Small Business Administration (The SBA) responded with amazing alacrity in the early days of this crisis to provide vital support to Americans and American businesses. Yes, there’s been tremendous chaos around those initiatives.

In our opinion, that chaos, specifically about EIDL program loans, arises from two sources.

First is the overwhelming number of requests. According to an SBA Press Release on October 28th, 2020, SBA has funded nearly 9 million loans worth $7 billion. Chaos or not, the SBA did an incredible job of helping American businesses with the two COVID-related loan programs, EIDL and Paycheck Protection Program (PPP).

Our second opinion about the chaotic state of SBA EIDL response focuses on the SBA’s internal operations mindset. We mentioned in our introduction the drastic difference between a natural disaster such as a tornado, flood or wildfire, and the COVID-19 disaster. This pandemic is like no other disaster ever experienced in American history. And yet, with all their heroics on the frontlines performed primarily by the amazing SBA agents, loan officers, and processing staff, the upper level SBA Administration applied standards more relevant to the traditional natural disaster phenomenon.

To this day, we are dumbfounded by the SBA’s Administration’s failure to radically adjust the thinking and ultimately guidelines and processes for the EIDL program.

As amazing as our Government’s response has been to the financial uncertainties of this pandemic, there is surely more assistance to come in the future. As of this writing there is no second stimulus package negotiated or finalized in Congress. It is our opinion this will change as the pandemic moves into the second year of human distress. With any future stimulus package there are sure to be improvements and revisions to existing SBA programs.

Presenting this information at this time, in our professional opinion, will help business owners understand the basics of the EIDL program in anticipation of just such changes. When you install a fire extinguisher in your house, you probably took a moment to read the directions, didn’t you? Hopefully, you’ll never need it, but a basic understanding of when and how to use the extinguisher will surely come in handy in the event of catastrophe.

COVID-19 Recommendations For Your Business Survival

We were recently invited to attend a professional event as guest speakers. At first we thought we would attend via video conferencing. We then discovered that the event organizers expected us to physically visit their office to participate in the event. This raised serious concerns for us, especially since Trevor was ill with COVID-19 over the Summer.  We sent an email to the event organizers expressing concerns and asking a series of questions about their safety protocols.

As soon as we hit the “SEND” button, we realized they could have been more proactive in providing information to us FIRST about the safety protocols. Thus was inspired the following advice to our business owners. We hope you will find this useful. We welcome comments about this advice.

DO MORE FOR YOUR CUSTOMERS WITH YOUR COVID-19 SAFETY PROTOCOLS AND MESSAGING

The time is right for you to help your customers with concerns about visiting your business. Step up your safety protocols and your message about those protocols. Many more Americans are aligned with recommended safety guidelines including mask-wearing and social distancing. As a business trying to survive through this pandemic, get the word out to more people that you understand their concerns.

With the ongoing COVID-19 crisis your customers have concerns about meetings outside of their home or office. Be proactive in your understanding of their concerns. Apart from any local, State or Federally mandated safety protocols, determine how you can add to those fundamentals. If you’re not required to provide free masks, do it anyway. If you’re required to have a certain size of plexiglass divider, install larger dividers. If you’re required to have a specified number of hand sanitizer stations, add more.

You can’t really go “over the top” during this pandemic; the more you do to acknowledge the concerns of your customers about their own safety and that of your employees, the better the likelihood of increasing your customer attendance.

Once you’ve done that, then you need to “go tell it on the mountain” and broadcast the level of protections you’ve implemented.

Get the word out through every channel possible. Your messaging could include a phrase like this: “We want to provide you with assurances of safety protocols before you visit our store/restaurant/office. We want you to feel safe during these uncertain times.”

With messaging like this, you are both acknowledging the “pain points” that many people are feeling and you are increasing the numbers of customers likely to visit. It’s not enough to attract customers who already feel more comfortable going out and about during the pandemic with less anxiety; you need to pry the other, more anxious customers out of their protective environments.  Your message and your protocols will accomplish that goal.

Take a proactive stance that can only raise your customer’s confidence in your attempts to keep them safe. We have some suggestions for advance messaging before a customer visits your office/store/restaurant:

  1. Consider providing a list of the safety protocols you’ve implemented. On the list, note which ones are government recommended and which ones you’ve added for the extra level of caution.
  2. The next suggestion is a really difficult concept because you are acknowledging the customers’ concerns in a way that many businesses fail to do. Essentially, you’re going to remove some of the burden of safety precautions from the customer.

While it may seem that the following questionnaire might frighten away people, we believe the opposite to be true: you will actually attract more customers.

Understand that the vast majority of Americans are already worried about being infected with the COVID-19 virus. Ignoring that concern, assuming that everyone is taking precautions into their own hands or trusting a business with only minimal safety protocols is a fatal mistake for a business trying to survive the pandemic.

Become a “partner” with your customers by acknowledging their worries. Create a dialogue to demonstrate your intense interest in their safety and that of your employees.

We recommend that you include in your messaging these additional information points about your focus on the safety of your customers and employees:

  • Describe how many other people will be in attendance on the day of the event/meeting/reservation, including before and during your customer’s visit.
  • Provide detailed descriptions of the protocols in place currently at your business.
  • Provide a diagram of the business space demonstrating the measurements in relation to your customer’s ability to maintain social distancing. Note the plexiglass and hand sanitizer locations on the diagram.
  • We recommend you send a questionnaire to customers either before they attend a meeting at your office or visit your store/restaurant. Make this questionnaire part of your safety protocols in advance of the customer’s visit.

We know that many businesses are providing a short form of this questionnaire only at the moment of entry. In our opinion, while this is compliant with recommended guidelines, it doesn’t do enough to soothe the worries of many more people. And you want to attract as many customers as possible to survive this pandemic.

We’ve set up a minimal questionnaire. You’re welcome to copy this and use it along with your local, State or Federally-mandated questionnaires:

Please REPLY to this email with your answers to the following questions so that we can assure your safety of you and the safety of our other customers:

  • What is your personal opinion on mask-wearing requirements? 
  • Do you wear masks constantly, occasionally, rarely, or never?
  • Have you been diagnosed with COVID-19 or been in proximity recently with someone diagnosed with the virus?
  • Have you attended a social or professional event with more than six people in the last 30 days?

We recommend you provide this questionnaire, along with the list of safety protocols at the moment a customer confirms attendance at a meeting or even when they make a reservation at your restaurant. We know that many business owners may be fearful that such communications may actually scare customers away. Frankly, we cannot imagine how your interest in clear communications and a dedication to customer/employee safety can be more frightening than the actual COVID-19 virus!

Remember that you want to attract the customers who are taking extreme precautions. They may even be the customers reluctant to venture out of their homes.

Wishing you the best during these difficult times! Stay safe, stay well.

3 Metrics to Watch

We find business credit financing solutions for business owners.  We also find that many business owners hold anxious trepidations about the concept of borrowing money.

Yet, the need does arise for working capital to continue to grow your business success story.

Whether the working capital need is unexpected–due to an unusually large order from a customer, a seasonal downturn in revenues, or a sudden opportunity for growth such as purchasing a competitor–or a planned requirement such as equipment purchase or investing in a new marketing plan, your business will need capital to grow.  Unless your profit margins or cashflow planning have created a massive pile of cash for just such a capital expenditure, you’ll need to go outside your company to find that money.

The alternate choice to credit financing is to bring in capital from other equity sources.

Refinance your personal home or leverage your retirement accounts and bring in the required capital.  Sell off valuable equipment, ideas, collectibles.  Bring in an equity partner.   We’ve pontificated at length about the last option…do you really want a partner who may wind up telling you “how to make the pizza?“

There are many reasons why choosing equity sources for capital infusions are bad for you personally and professionally.

Yet, too often this is the path chosen: equity sources.   Business owners go down this path for several reasons: time-constraints to obtain the capital; anxiety around the idea of borrowing.

Credit financing to obtain working capital doesn’t have to frighten the heck out of you.  At Aurora Consulting, we understand the worries that come along with borrowing money: “What if there’s a downturn in my business and I cannot repay this loan?”

Especially after the global meltdown and subsequent recession of a dozen years ago, lingering fears and doubts remain laced through our economy and our economic thinking like clogged drainpipes during a sudden torrential downpour.  The water has to move, and move quickly, but the remnants of various and miscellaneous flotsam and jetsam are jamming up the pipes and the rainwater backs up causing all kinds of other problems.

The same is true of these lingering doubts about borrowing money.  Credit can be a good thing and nothing to be fearful of when approached sensibly and when the credit terms are incorporated into your business planning.

Still, these worries hang on.

We’ve come up with the concept of 3 important business metrics you can keep an eye on after you’ve borrowed that needed working capital.

Remaining vigilant on these metrics can help you avoid a sudden negative revenue issue which could lead to default on credit obligations.  While it may seem obvious to you that these are the metrics ANY business should constantly monitor for maintaining profitability and continuing growth, as with all advice and observations we provide from Aurora Consulting, our real-world experiences demonstrate these ideas are not so obvious to every business owner.

What is obvious is worry and anxiety.  Thus, our presentation of these not-so-revolutionary-ideas.

  1. Profit margins: pricing and expenses
  2. ROI: products/marketing plans/infrastructure/product development
  3. Customer Retention/Construction

Monitor these important metrics by maintaining your financial reporting to the most current and efficient methods.   We often see businesses with financial statements such as P&Ls and cashflow statements that are not up to date.

A balance sheet isn’t just for your CPA to use when you’re filing your tax return!

And the ever important marketing and business plans?  Wow, we are constantly shocked when we request these vital documents from our clients to include in a financing request package only to be told they don’t have one!

Creating and maintaining these financial reporting documents is incredibly easy with the sophisticated computer applications available, even for your smartphone!

Making the time to check  in with them is another thing altogether.  We sometimes feel as if our clients present us with financial statements and they haven’t reviewed them, recently, or ever.

That’s why we suggest you at the very least monitor these three important metrics on a constant and vigilant basis. WHY?

First, it’s good for the overall health of your business.
Second, you will find you can anticipate challenges and successes before they arise.
Third, you can plan for those challenges and successes well in advance and avoid nasty surprises and cashflow chokeholds.

Finally, and best of all, you can lower or maybe even eliminate altogether your anxiety and fears of credit financing capital to grow your business.

The Truth About Credit “Repair”

The most fundamental truth and reality check is this: a consumer cannot “remove” an account that is legitimately your account that is showing on your credit report.

While the account may appear to removed during the dispute process on the report provided by the credit bureau, the reality is that account is most likely to return to a credit report at some time in the future because it’s your account.  This is true whether it’s a positive or negative account.

In other words, if that account was truly yours to begin with, it’s going to reappear at some point on the credit report.  The confusion arises from the dispute process. During the dispute, the credit bureau is required by law to remove the disputed account from the credit report while they investigate the validity of the information with the original creditor.

Often, the bureau provides an updated report showing the removal.  And the investigation process, required to be only 30 days by law, often takes longer. Thus, the credit bureau “extends” the 30 day investigation period, and representing to the consumer that the information has been removed during the investigation.

This is the part where you need to pay attention.

This is one of the major frauds of the entire credit repair concept.  Once the credit bureau receives the accurate information from the original creditor, that account goes back onto the credit report.

A credit report can only be “repaired” to the extent that incorrect information can be amended to accurately reflect:

  • Correct status of an account (such as paid)
  • Removal of a duplicate account (often happens when a minor discrepancy in account balance or account number is reported by the creditor)
  • Removal of an account from a family member with the same name that appears on your credit report (John Jones Sr. mortgage appears on John Jones Jr. report)
  • Correct name misspellings or home addresses, and other personal identifying information of that nature.

Closed accounts aren’t necessarily the problem with improving a credit score.  That’s only one component of the overall scoring algorithm. What most consumers with decent credit misunderstand is their use of their current accounts. Such as, the more legacy accounts you have open and active today, with 50% or less utilization (relative to credit limit) and an on-time payment histories, will generate a better score.

Even with a higher utilization of 50% or more on several revolving accounts, assuming 3-5 active accounts with two years or longer histories and active use, scores can be very good and even excellent.

Please reach out for any further clarification. This is where we see most consumers flail with thinking through the process of “repair” and/or hiring someone to manage the minutia, which will only result in frustration and regret.

When we work with our business financing clients, we include a merged credit report with Classic FICO scores from Experian and Equifax as part of our qualification process from the very beginning.

Most Lenders won’t run a credit report until late stages of the loan application process. Our method helps us to understand and advise the business owner of any challenges on the credit report that may impinge on our ability to secure financing from a Lender.

Trevor, our Chief Financing Rock Star, was a Mortgage Banker for 30 years; credit is one of his areas of special expertise.

Download our E-Book, “Rebuilding Your Credit After COVID”.

Maybe you haven’t filed for bankruptcy; you will still pick up some tips in this ebook.

You Want to Repair Your Credit

We want you to have peace of mind that, should you need to apply for business financing, you’ll be prepared to keep your business going through this or any unexpected crisis.

If you are considering business financing in the future, or simply want to know what to do and how to go about applying for business financing, Aurora Consulting offers a flat fee consultation to help navigate the bumpy road, the treacherous waters of financing.

We review all aspects of what’s required in a loan application including your credit report, financial statements, business plan and marketing plan. We review with you items in your credit report and what happens when you try to repair your credit.

Our consultation includes a credit report with real credit scores from Equifax and Experian.  These are the “Classic FICO” scores only available to financial services institutions.  These scores can be radically different from the scores available to consumers.

When we run the credit report, we assess any challenges that could affect your loan application in the future.  More importantly, we’ll give you the correct advice, based on decades of experience in lending and based on current experience working successfully with Lenders on business loan applications, to address any challenges on your credit report.

What makes us crazy is when a new prospective client says, “I’m holding off for now because I want to take care of my credit report.”

There is no way a business owner can know what is acceptable and what is unacceptable to a Bank for business financing.
We can, and we do know.

Worse, in our experience, more often than not, people take actions to “take care” of their credit that actually does not help them in the business loan process. Sometimes, what they think they’re doing to help, makes their credit worse!

4 things NOT to do with your credit report:

  1. Don’t pay off Collection or Charge Offs or Judgments. Many times these accounts don’t affect a loan approval depending on type of account and amount.  Plus paying these accounts off can lower your credit score dramatically.
  2. Don’t pay down credit card balances.  You may pay down the balance to a level that seems worthy, but actually could have a negative effect on your score.
  3. Don’t pay credit card balances to zero.  If an account has a zero balance, the credit scoring system has nothing to score!
  4. NEVER pay anyone to “repair” or “restore” your credit. According to the Federal Trade Commission, you’re paying for something you can do yourself. And the “guarantees” these companies offer often fail to materialize. Read this article for credit repair scams.

Download our EBOOK on how to rebuild your credit. This information was curated after 30 years of reading thousands of credit reports.

We Anticipate Problems to Create Solutions

Our Process Anticipates Problems, Creates Solutions

The good news is that Banks are lending again on a limited basis for non-disaster loan requests.  The bad news is that the loan products are limited and the underwriting guidelines are very, very restrictive.

Many industries/businesses are excluded from loan programs.  Banks simply cannot determine yet the viability of the businesses to survive the pandemic. Risk is too high and thus doors to the lending vault are tightly shut.

Today we spoke to a Bank on four different loan scenarios. Each of these businesses has challenges on their loan applications of different sorts, whether it’s credit, cashflow, type of business, COVID-19 impact on the ability of the business to earn income.

In the hour-long conference call with the Bank, thanks to our qualification process here at Aurora Consulting, we easily addressed the Bank’s concerns and answered their (often) difficult questions as they assessed the risk on each loan scenario. In three out of the four scenarios, we received positive feedback of interest from the Bank. While this interest does not guarantee a loan approval, this, in our experience is a giant hurdle we overcame. 

The rest of it is the loan process.

We also spoke today with a prospective new client in a follow up to our initial call last week.  This client seeks over $4Million in funding for a unique business, a business for which many Banks and Lenders do not provide funding due to their lack of understanding of how this business operates.

We had already identified a Lender for this financing request.

In our follow up call today, the prospective client indicated they would soon make a final decision on moving forward with Aurora Consulting to secure the financing. They also indicated they were working on their credit.

STOP. RIGHT. THERE….BEFORE we go any further. (Meatloaf medley playing).

A client should not “work on their credit” without proper guidance. Luckily, we provide that kind of guidance here at Aurora Consulting. While we don’t believe in credit repair/restoration, we do have decades of expertise with credit and we also know the appetite of commercial lenders when it comes to credit. Note: We have not yet seen this person’s credit.

Our process at Aurora Consulting includes running a credit report as soon as we sign a consulting agreement with a new client. We do this so that we can anticipate any issues that could slow down or prohibit the lending process. We do this upfront so that we can provide advice that leads to a positive result for our clients.

The same holds true for our entire process. We review all financial statements, business plans, marketing plans and any other pertinent items in the early days of working with a new client.  

We do this to anticipate and resolve problems a Bank or Lender may have in the future.

When you apply directly to a Bank/Lender for commercial financing, these items, credit reports, financial statements and the like, are not seriously reviewed until the very late stages of the loan application process. By then the applicant has spent time collecting and submitting documents and spent money on application fees, appraisal fees and other associated costs.

Literally most Banks/Lenders do not run a credit report until the very final stage of the application process, weeks or months after the initial application. At that point, if a credit issue arises on the credit report, all those weeks and months of work are quite literally flushed down the toilet and the loan is declined.

Our role as your financing Broker is to review all relevant documents, including a credit report, in the early stages of your request, before the application, before we’ve even considered conversing, in depth, with a Bank/Lender.

That’s why today, we hit the mark with 3 out 4 of our loan scenarios getting the green light from a Bank to move forward to the application process.  

We were prepared for every question and concern the Bank had because we’d reviewed credit and documents. We anticipated problems in advance and could converse honestly with the Bank on possible workarounds for those problems.

It’s what we do, because we are the business-owner’s advocate. We work for the business-owner. We would be remiss if we didn’t share with you that banks call us when they can’t underwrite the loan. So we understand their process.

Ask us any questions when it comes to business loans. If you want your business to survive, and THRIVE despite the worst crisis we’ve seen in our lifetime, please call us with your questions.

Email Curious@AuroraConsulting.biz