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What Does Credibly Look for When Funding a Small Business?


Jeffrey Bumbales

Credibly may rely on Big Data and Big Brains to create funding offers for our small business customers, but our approval process isn’t all that complex. Ultimately, it comes down to cash flow and verification — simple concepts that can have a major impact on your business’s ability to get funded.

Cash flow management is the key measure of a business’s health. When a business applies for funding, we scan through their daily bank account activity, looking for consistently strong balances. If your bank account shows repeated overdrafts, negative balances, or NSFs (insufficient funds), those factors will count against you.

A Better Measure of Overall Business Health

We understand that not all industries operate the same way. For example, a construction business depends on major projects that will generate massive cash inflows at one time, but that might be the only time that the business earns significant money in a given month. As a result, their bank balance will naturally have peaks and valleys.

A restaurant‘s account balances, on the other hand, might be very smooth and consistent because they’re taking in money through credit card processes every day, and paying their bills as they go along. If a business is in a college town or resort area, there will be seasonal revenue trends reflected in their balances. Credibly has the data and the background on these industries to know what to expect.

Verifying Your Information

A lot of what we do in the early stages of funding approval has to do with verifying basic information. The use of social media and online tools has become an important piece of diligence. We use social media to verify that a business is open, we search for recent customer reviews, we look the business up on Google Street View, and we make sure we have the business’s real phone number, address, and the owner’s name. The last thing we’d want to do is offer funding to a business that isn’t legitimate, so we can’t overlook these steps.

The verification process can go even faster if your business is registered with your state. Whenever possible, we pull SBRS scores from LexisNexis, which will confirm if your phone number, address, and name match to your entity. That makes the diligence process run a lot more smoothly, and it’s something that business owners rarely think about.

Being able to quickly provide necessary documentation can also reduce the amount of time between application and funding. The requirements will potentially be different based on the size of the funding deal and the industry, but aside from your bank statements, tax returns are something we commonly ask for; they often help us illuminate a business’s ownership and the overall health of the business. If you have to spend time hunting for simple documentation, it can delay the funding process.

Hands-On Analysis

For funding deals that are $50,000 or higher, we typically order a site inspection. Sometimes it will be coordinated between the inspector and the business owner, and other times it will be a surprise visit. An inspector will walk through a store, talk to the owner, and take pictures of the business as well as their license and certificate of incorporation documents. Don’t be alarmed by the site visit. Instead, be prepared by having those business documents at your business, as opposed to at home or in your lawyer’s office.

If you decide to seek funding with Credibly, there’s not much you can do within two weeks of applying that will suddenly make you a more attractive applicant. It’s more about the long-term decisions that you make in managing your business and planning ahead. You may not need capital today, but you never know when the right opportunity will arise.


Gregory M. DeMars, CFA has been Credibly’s Director of Financial Planning & Analysis since November 2014. Prior to joining Credibly, Gregory worked in investment banking, private equity, and corporate finance. He received his MBA in Finance and Strategic Management from Indiana University’s Kelley School of Business and his BS in Finance and Economics from the University of Dayton.