Think of "eHarmony" for businesses and banks. That's what MoneyPath does; it matches up businesses who want loans with lenders who are willing to provide loans. I have been wondering why no one has done this, and now someone has.
MoneyPath, founded by several young entrepreneurs in Louisville, Kentucky, went live on Monday with their website. For businesses looking for loans, they have made the process pretty simple: you go to the website, enter the information requested, and you can receive responses from up to four banks. Since banks pay for the leads, the service is free to borrowers. CEO Todd Earwood says that even start-up businesses can get funding from banks, but they do need to be more creative now.
Loan Requirements
When you start working with the banks that contact you, you'll find that the game is still the same. You must still provide the necessary information, and collateral is still required. The "4 C's of Credit," including an excellent credit rating, apply now more than ever. Earwood says that, to get banks to take you seriously, you must have collateral.
Creative Financing
If you are starting without business cash flow or assets to show the bank, you might have to get creative by pledging personal assets. Todd says people mistakenly think they will have to sell these assets, but what you must do is pledge them to be available if needed. For example, the bank doesn't need you to cash in a CD, but it might want you to put the bank in a position to take the CD if you default on the loan. Don't forget, Earwood says, banks still need to make loans, and they are paying for the leads, so they have an incentive to help you with the loan.
Organize Before You Apply
Earwood says the most important thing you should do before applying for a loan is to get your personal and business records in order. The bank will require three years of tax returns from the business, personal tax returns and personal financial statements, and details on any collateral you are putting up. Failure to get these records to the bank will probably keep you from getting a loan.
MoneyPath makes no guarantees that you will get a loan; they just give banks your information and the banks contact you to start the process. Since this is a new business, I have no information on from individuals who have used their service. I would be interested in hearing about your experience with getting a loan through MoneyPath.
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MoneyPath has been needed for a long time… and more than ever right now!
With the big name banks not lending money right now, it is a huge opportunity for smaller regional and local banks to pick up the slack. The problem I have found personally and working with fellow real estate investors is a lack of awareness of these smaller banks. This type of service is exactly what we need right now to keep deals flowing