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    3 Replies Latest reply on Feb 21, 2015 2:51 PM by JerryChau

    Business loans in a Dodd Frank world....

    ncstec Wayfarer

      In years gone by one of the most common ways small business got extra money to expand, or to pay off existing high interest debt, was an equity line against their home.  Now, in this post "Dodd Frank" world things have changed, and not for the better.

       

      Like so many self employed people, I have maximized my write offs for over 15 years, so when recently I tried to tap into the over $250k of equity in my home to pay off business credit card debt I was turned down thanks to the new Dodd / Franks rules.


      So my question is, are small business loans subject to the same rules, or are there other programs just for business owners.

       

      Thanks.

       

      Neil S.

        • Re: Business loans in a Dodd Frank world....
          jaynorth Tracker

          Well my dear friend there are many rules & regulations operating related to small business loan, but overall you need to keep your credit history better, to accessed to business loan by any financial institute, Also you can follow SBA for further clarification & details on these.

          • Re: Business loans in a Dodd Frank world....
            JerryChau Tracker

            Neil,

             

            Bankers will blame the vagaries Dodd/Frank and the Consumer Protection Finance Bureau in a pathetic attempt to keep you as a checking account customer. It is a feeble way to say, “don’t blame it on me.”

             

            In reality, neither rulings nor agency has much to do with using a home as a vulnerable piggybank to finance a small business or a plunging credit score from maxing out credit cards.

             

            More to your question about the “rules” for getting a small business loan; the answer is, it is much more difficult than getting a home loan. You will need a higher credit score, substantial cash flow available to pay the proposed debt service and collateral.

             

            The not-so-easy solution is to focus on making your business great and paying off your home equity loan and credit cards. Small-business lenders want personal FICO scores in the 700-750 range.

             

            Neil, if it were easy, everyone would be an entrepreneur. Hang tough and don’t give up!

             

              Jerry Chautin
            Former entrepreneur, commercial mortgage banker & business lender
            Currently, commercial real estate & business columnist & content blogger
            SBA's 2006 national "Journalist of the Year" winner