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Prior Business Experience Can Be Helpful When Starting a Small Business

Guest post by: Kristin Thayer

Article Overview: We recently worked with a client who wanted to open a new restaurant. After several discussions, we learned that not only had she owned one restaurant but she had owned several restaurants in the past and had sold her last one in the late 90's. Would she still be considered a start up business? Maybe, because it had been quite some time since she last owned a restaurant but her prior Business Experience would help her significantly when applying for Small Business Financing, especially in today's tough economy.

Prior Business Experience Can Be Helpful When Starting a Small Business

Many banks and finance companies are holding out on lending money to businesses unless they have very high credit scores and have been in business for several years. This can be very disappointing for new business owners who are in need of funds and would have been able to get them 6 months ago. It is scary how quickly the financial markets have changed and tightened their belts!

Our client, who was very anxious to finance some equipment for her new restaurant, went into full details on how successful she was with her prior restaurants. She also discussed how her new location was one of the best in her area which was a sure win for her new restaurant. While this information makes for a great story, it does nothing to help get approved for an equipment lease.

The main problem we were having in helping her get financed for this new equipment was her Fico Score. It was on the weaker side but she was able to get a relative to co-sign. We thought the strong credit of the co-signer was going to be an instant approval until the finance company came back asking for proof of our client's prior Business Experience in the restaurant industry.

Unfortunately, our client had recently moved back to the states and all of her documentation was still in boxes over-seas. After several minutes of brainstorming, we were finally able to find some older Articles of Incorporation online under her state's Secretary of State website, which allowed us to get her the funds that she needed for the equipment.

As you can see, it is very important to keep documentation, especially if you ever plan to re-enter the business scene. Financial institutions are very strict right now and do not want to let go of their money in this high risk economy.

If you are looking into Starting A Small Business, do your best in making sure all of your ducks are in a row or you may be looking at a long road of "No!" and "Unfortunately, there is nothing we can do at this time."

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Article Tags: business experience, economy, restaurants, small business financing, start up business, starting a small business



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