December '16

For the Business of Apparel Decorating

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80 || P R I N T W E A R D E C E M B E R 2 0 1 6 FINANCING CONSIDERATIONS nied when applying for a loan. Sometimes people have credit issues for reasons beyond their control. These issues can, unfor- tunately, become a barrier from entry into the world of small business. However, according to Business News Daily, there are five other factors that business lenders consider when you apply for financing. Cash flow: Lenders look at your cash flow history, projected cash flow, and sales numbers to determine your ability to pay them back in a timely manner. Collateral: Depending on the strength of your cash flow, banks may look at your current assets such as mortgage, work- ing capital, inventory, etc., to see if anything can be used as collateral to secure your loan should you have trouble paying it back. Business credit: In addition to your personal credit and pay- ment history, lenders will check if your business entity has es- tablished any past credit, including on-time bill payment for any business-to-business services. Character: Your overall character and reputation in the community matter to the people taking responsibility for funding your business. Capacity: This is typically the least important factor in a credit decision, but lenders still want to know the capacity your business has to grow. A local ice cream franchise, for instance, has a limited capacity to boost sales, but a global e-commerce or tech business could grow exponentially in just a few short years. It's normal to have reservations about signing on with a lender. Assuage those reservations by researching your con- sidered lenders and seeking out ratings in things like compli- ance and security. Outisde funding is now a standard model for small and mid-sized businesses, but the lender you choose should be in step with your unique needs within the decorat- ed apparel industry and have previous transaction experiences within the field. Compare before you sign anything, and read customer reviews.

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