Getting a loan or a line of credit for your small business in this environment is tough enough. If you’ve experienced a bankruptcy in the past, you probably feel like the odds of you getting approved for one this time around are zero.
Well, it’s not easy, but it’s certainly not impossible.
A recent article from BusinessWeek offers some tips for how you can improve your chances of qualifying for a loan post-bankruptcy:
- Community banks will be more understanding than big ones, most of which have an automatic screening process based on your credit score that will immediately eliminate you.
- Explain exactly what happened in a face-to-face conversation with the loan officer, and talk about everything you did “make good on your obligations after the fact.”
- Talk to a number of bankers. Even when they turn you down, keep following up with the ones who seemed most understanding — it’ll maximise your odds of getting a loan down the road.
- Definitely start off with a small request — after around two years of good behaviour and on-time payments, you should be eligible to ask for a bigger amount.
- Consider bringing on a partner who has an excellent credit record — although you are still considered somewhat of a liability, it will make banks more confident in your new venture’s credibility.
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