Each week, we’ll interview one of our experienced Finance Officers for a brief question and answer session about something interesting from the week, along with tips and tricks to make your finance process easier, and their unique perspective on the industries and customers we work with.

This week, we caught up with AJ Ochoa in our Portland office who was working with a customer whose credit score and experience created a situation that would have made other lenders turn the other way.

Q: We’ve been continuing to look at customers that are a bit more unconventional in the commercial lending space. Could you tell us a little about this particular customer?

A: This customer had a credit score of 544 and a revolving available credit of only 21%. She didn’t have first-hand experience in the logging industry, which is the industry she wanted to get into. She did mention that her family has been in the logging industry for decades, but she didn’t have any experience. However, she did have the right attitude and the motivation to get started in operating her business. Everything I asked of her she would provide within a couple hours!

Q: Is that lack of personal experience typical?

A: Sure, we have a lot of customers who apply for credit that have no experience in their prospective industry and have poor credit. Often times, we aren’t able to get them approved so it is a bit of a challenge when we do get those customers.

Q: You mentioned she had a credit score of 544. What were some factors that contributed to that score?

A: The main reason her score was so low was the high revolving credit debt. She had some other factors that were positives, which was great, but that high revolving credit debt really brought it down.

Q: Was that something that affected the loan process in this case, and would it affect the loan process in similar cases?

A: It does limit us on offering better financing for challenged credits when they are in the process of opening up their business. She was also trying to finance a piece of equipment which automatically landed her in one of our programs that requires 50% down, which is one way we are able to provide financing for start-ups that have a personal guarantor with poor credit.

Q: How were we able to help this customer?

A: We sent the application to our preferred lenders for this program, and all of them declined except for one. In the end, we were able to get the customer approved with better terms than what we had quoted.

Q: How do you think other customers can learn from this experience?

A: Customers should be aware of the commercial loan process, and how different commercial lenders can help. It IS possible to get an approval with challenged credit but does require a heavier down payment. Be ready for that when you are starting your search.

Q: What can you tell us about how things progressed with your customer?

A: She was able to get her machine so she could start generating revenue for her new business. Once things start picking up, she can quit her full-time job and start focusing more on her business… and have the freedom to do what’s important to her which is caring for her newborn. The payment did seem high to her but she realized that she was going to make almost 20 times more in revenues so it was a no brainer to her.

Next week we will check in with another one of our finance officers to continue to give prospective on how we are able to help customers just like you! Stay up to date and learn more from our valuable resources at www.AmericanEFS.com/The-Bottom-Line