At Inc., we often hear from bankers who say they want to reach out to the small-business community. But when it comes to actually providing credit, many still rely on application and approval processes that are as offputting as they can be for small, growing businesses.
However, BayBank, based in Waltham, Mass., has come up with a refreshing approach -- a one-page credit application form aimed at "removing barriers" to small-business loans, according to Joe Roller, a managing director. The form illustrates what small-business owners should be looking for when shopping for potential lenders:
· Brevity and clarity: The form can be answered in less than an hour, without any high-priced assistance from a company's lawyer or accountant -- and without disclosing confidential information on topics such as succession plans, customer history, and financial stability.
· Win-win personal and corporate benefits: "Most of the companies applying for these loans -- which generally range between $5,000 and $50,000 -- don't have much in the way of a corporate credit history," notes Roller. "So we make our decision based on the owner's credit record." The loan is granted to the corporation, but the owner's own credit history is what helps the business build its credit history.
· Realistic requirements: When you apply, you'd know if you had a good chance of winning approval, since the requirements focus on your personal charge-card history, existing personal bank accounts, and in some cases, the submission of several years of tax returns. (All too often, traditional loan-application forms make it difficult for a businessperson with no financial background to understand what basis bankers are using to evaluate the company's creditworthiness.)* * *