Our biz is coming up for a line of credit renewal this month. Wells Fargo is our bank. Do you know what they will look at-they've asked for a bunch of paperwork and of course, like most, the last 3 years weren't great but we did show an improvement in 2010 (by the 3rd Qtr). Will they pull our biz credit report and generally which one would they use? how heavy does our biz credit report weigh if we have partners with good credit and that are PG's on our current line of credit. Also, if we decide to ask to term out a portion of the line we have now, will they approve us eaiser? thanks.
I recently renewed a business credit line and the bank seemed to be most interested in our biz financials and the personal financials/credit scores of the guarantors. They may have looked at our D&B report too, but what they really wanted to see was cashflow in the business and financially stable guarantors.
thanks....our biz credit probably isn't great....D&B is better than our Experian. so, i was hoping they'd focus more on the partners rather than the biz credit. the assets are there and will more than cover whatever line we're given. were you given the same amount as you had before? i understand SB LOC have been drastically cut...5 years ago, Wachovia was just giving out $500K lines!
In my experience, you've really got to have both going for you these days. Underwriters will want to see positive cash flow and growth in the business, backed up by strong financials from the guarantors. Every credit line I've worked on during the past 2-3 years for a small business has either been reduced or termed out. It's definitely not even close to what it was like 5 years ago.
Thanks..the firm's owners have very strong financials and can each double the current line's limit with their assets (liquid-we never needed hard collateral). Now, i understand this loan was given to us 5 years ago where bankers were throwing lines to anyone We were given a $500K line. But, when you mention nowadays banks are terming out...will we be denied a line or will we be able to term out a portion of it and renew a new line of about $150k?
It's going to be different in every situation depending upon the bank and the business. If you haven't been utilizing the line, they may come back after review and want to reduce to $150K or something. If you've got the line almost maxed out and they're worried about your ability to repay, they may want to term out a portion or the entire balance. It's too difficult for me to make a guess without knowing all the details. You just need to keep a very open dialogue with your underwriters throughout the process.
what do the underwriters ask? i thought once it was in underwriting, we don't have much say.....thought it was more our banking rep that could get things taken care of....
Let me rephrase- you need to keep an open dialogue with your bank rep who will then work directly with the underwriters. Stay involved and be nosy throughout the process- you can't just sit back and rely on the bank rep to take care of everything. My experience has been that often those guys/gals are really just relationship managers and aren't that competent. You need to make sure your business is being presented to the underwriters correctly and in the best light.
