FUNDING: BUSINESS CREDIT
SPONSORED CONTENT
The New Paradigm for Getting Approved FOR REAL ESTATE INVESTORS SEEKING THE LOWEST-COST FINANCING AND FUNDING IN THE NEW PARADIGM, KNOWLEDGE OF THE NEW RULES IS KEY.
MERRILL CHANDLER
B usiness credit is the lifeblood of real estate investing and business entrepreneurship. It’s the fuel that powers dreams into reality. Yet, for many real estate investors and business go-getters, navigating the murky waters of business credit can feel like sailing through a storm without a compass. In this article, we’ll delve into the intri- cate world of business credit, unraveling the mysteries of the Old Paradigm while shining a light on the transformative power of the New Paradigm.
been. The Old Paradigm of business credit, often referred to misleadingly as “corporate” credit, was once the cornerstone of small business financing. Dating back to the pre-2008 era, this paradigm relied heavily on traditional metrics such as the Dun & Bradstreet PAYDEX Score and manual underwriting processes. In those days, securing business credit was a grueling process requiring as much “full documentation” as a conventional mortgage—and required a lot of finger-crossing and praying for mercy to the funding gods.
the foundations of the Old Paradigm. Suddenly, lenders became wary of extending credit to small businesses, and the PAYDEX Score lost its luster. As the dust settled, it became clear that the days of relying on heavy documentation were over, and a new era was dawning. THE PITFALLS OF THE OLD PARADIGM In the heyday of the pre-2008 Old Paradigm, entrepreneurs could secure business credit without breaking a sweat. But therein lies the danger. With lax underwriting standards and a lack of scrutiny, many businesses found themselves drowning in debt they couldn’t repay, and lenders discovered that even the documentation they
UNDERSTANDING THE OLD PARADIGM
THE FALL OF THE OLD PARADIGM
To understand where we’re going, we must first understand where we’ve
But then, the financial crisis of 2008 struck like a wrecking ball, shattering
40 | think realty magazine :: may - june 2024
Made with FlippingBook Online newsletter