05/11/2023
The Business Stability Fund Program
Your business bank account rating is key part of becoming bankable. Business bank ratings indicates the size of the loan your business has the ability to debt service. Your business bank account reflects how you manage your cash flow. Lenders want to know that your business cash flow is capable of handling the business debt and expenses on a consistent basis. Bank accounts with low average daily balances, or that show NSF returned checks, can get your business loan applications declined.
Bank Ratings Consist of Three Components...
1. The first component is your balance rating. This rating is your average minimum daily balance maintained in your account over the last three (3) month period. Maintaining at least $10,000 will rate as "Low 5", $5,000 rates as "Mid 4", $999 rates as "High 3", and so on. You need to maintain a minimum "Low 5" bank rating ($10,000) for at least 3 months. Unfortunately, without at least a "low 5" rating, most lenders will assume your business has little ability to repay.
2. The second component is the bank rating cycle which is three (3) months. You'll want to have at least a "low 5" for the three months prior to applying for larger loans. This is to show lenders that your business has the ability to debt service. How much money you have going through your account each month does not matter. What does matter is how much is available each day for the last 90 days to pay debt.
3. The third and final component has to do with how you manage the account. NSF (bounced) checks destroy bank ratings. From this point forward, NSF checks are something you cannot allow.
Check your business banking general ledger checking account statements for the last three months and look at your average daily bank account balance to be able to self-calculate what lenders are seeing as your current "Bank Rating".
Bank Rating Account Balance
Low 3 $100 - $399
Mid 3 $400 - $699
High 3 $700 - $999
Bank Rating Account Balance
Low 4 $1,000 - $3,999
Mid 4 $4,000 - $6,999
High 4 $7,000 - $9,999
Bank Rating Account Balance
Low 5 $10,000 - $39,999
Mid 5 $40,000 - $69,999
High 5 $70,000 - $99,999
If you do not currently maintain a low 5 bank rating, or higher, the business stability fund program can enable you to raise your bank rating to a low five, while also providing a cash flow cushion to help your business survive cash flow demands, without ever going below, a low 5 bank rating balance.
Contact Mount Irvine Capital Group for more information
Mount Irvine Capital Group
[email protected]
www.mtirvinegroup.com
www.mtibackoffice.com
