Ideal Client Persona
- Time in Business- Start Up’s with $0 in revenue all the way to companies established for 2+ years with revenues up to $250,000.00 are probably the most ideal.
- Type of Business- High Risk, Low Risk, any risk type is ok but there will always be small differences between the funding of high risk and a low-risk business but not substantial enough for you to focus heavily on this.
- Capital Needs- Start-Up and Working Capital between $25,000-$150,000 is going to be ideal. If they’re looking for more than that or they’re looking for capital for installment-based purchases such as buying a major piece of equipment, purchasing a house, or buying a business Credit Card Financing isn’t going to be ideal (It’s still doable but it gets a lot messier at that point).
Ideal Credit File
Age of File-
- 5 years should be the minimum file type you run through a UBL program.
- 10 years and beyond is ideal.
- 12+ is the cherry on top of the icing on the cake
Credit Inquiries-
- 0 is ideal
- Up to 3 no matter the type within 6 months is acceptable.
- Anything over 3 will become more and more complicated and cause more and more denials for a reason such as “too many recent inquiries”.
- If they’ve applied to any Credit Card lenders that we would apply to (it doesn’t even have to be the same card) can cause us denials for multiple applications on file thus leading to fewer total applications being permittable for a plan.
Late Payments-
- More than 2-3 late payments in a 2 yr. the period will be a huge issue for lenders (especially business lenders).
- When they are greater than 2 years old the negative impact is much less severe but more than 5-10 greater than 2 years old will start to cause denials based on a late payment pattern.
Negative Accounts:
- 0 negative accounts (paid or unpaid) is ideal.
- 2 or less paid negative accounts is acceptable but will cause some denials or lower approvals if the rest of their credit doesn’t offset the impact of the negative accounts.
- 3 or more negative accounts (paid or unpaid) is going to start to feel like rolling the dice when it comes to the success of an application plan. At that point if their credit score and income aren’t strong it could cause the majority of applications to be denied.
Revolving Utilization:
- 30% is the rule of thumb. Anything over that performance will be inconsistent and is a credit by credit basis at that point.
- The lower the utilization the higher the score and the better the funding results will be.
- The rule we try and use is overall revolving at 30% or below and no individual tradeline over 50%.