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I've Found A Bank That Actually Lends!
By Michael Taylor
Well, there’s a been a whole lot of discussion here about whether banks are lending to small businesses in this environment. For BizBox posts alone, see here and here. Oh, and here, too. So I thought I’d share my personal experience, as a small business owner, trying to get credit from a bank in this enivornment.
Last month, in the midst of the worst credit crunch since the Great Depression, I acquired a large line of credit for my small business.
Now the astute reader will ask: how large is "large"?
I already had a decent line of credit from a national bank. But I just obtained a line 17x larger than that one from a small bank. Naturally, I’m in the process of moving my business generally to the new, smaller bank, which I’ll blog about next week.
The next question is: how did I do this?
My small business situation is unique. Still, I’ll offer a few reasons I was able to secure this valuable credit that may also apply to other small businesses.
1. The new bank was a de novo bank--in other words, a start-up--. It has only one branch, and bills itself as a community bank for small- and medium-size businesses.
2. My banker from the national bank, with whom I’ve worked for four and a half years, moved to the new bank and invited me to apply for a line of credit. This personal relationship has been a key to my success.
3. Not to brag, but my financial fundamentals are impeccable: I have perfect personal credit, four years of business tax returns, and two years of audited financials.
If there’s a “To Do” lesson to be gleaned from my experience for other small business owners in need of an increased credit line, at the top of it would be that you should try to seek out de novo banks. They are the only banks with pristine balance sheets in 2008, and they are naturally eager for new customers.
If any reader in the New York City area wants to know which insitution I now bank with, write a comment or send me a note (c/o bizboxonslate@gmail.com), and I’ll refer you. Also, feel free to leave a comment if you've had similar success already.
Comments (0)December 4, 2008 3:42 PM
