The Role Of Profitability In Bank Financing!

If You’re Paying Taxes, You’re Making Money. If You’re Making Money, You can Borrow Money!

That ties into that profitability piece. You have to make sure your accountant pays taxes. But if you’re paying taxes, you’re making money. If you’re making money, you can borrow money.

Banks do not like to hear about hope; “Hey, if this guy would just give me a chance at this deal, it’d work.” But you’ve got to understand that the banks are in the business of loaning money to profitable businesses so they can expand and make even more money. Your job is to make your business profitable, or at least appear profitable on your financial statements, to the point that a lender’s going to say, “Okay, you have enough extra income to pay me back when I give you this money.”

The Golden Strategy When You have High Revolving Debt!

The number one reason why business owners get rejected for a business line of credit from a bank is because their personal revolving debt it too high! Meaning, your business is up and running, your personal credit score is close to 700 but your revolving debt is 60,70, 80 or higher! The banks do not feel comfortable giving you more money for the business when you are considered way behind personally with the amounts of revolving debt (mainly credit card debt).

The key solution is to get a small loan in the name of the corporation or LLC and use that money to pay down your revolving debt to 30% or less. Then come back in 60 days and apply for the line of credit at a larger level. Ideally, the bank loan will be for 5-10 years at a small payment level.

About The Author: Scott Letourneau is the CEO of Fast Business Credit, Inc. When it comes to securing cash and vendor lines of credit and avoiding costly mistakes his company is the authority. For further assistance regarding the development of business credit go to or call FBC at 1-888-313-6333 or 702-977-5246.