Good communication between two parties is always important, especially when dealing with sensitive topics—like money. It is important for both parties to be on the same page and in sync with each other to avoid any miscommunication. Business Owners that used to borrow from banks increasingly turn to alternative capital providers to fund their business dreams. These non-traditional providers allow you to get the funds you need and are far are less stringent than banks when it comes to application requirements.
Even so, some clients complain about these policies that go hand in hand with using an alternative capital provider. But it’s important to keep in mind that, each time a business wants to obtain financing, , providers take a leap of faith: releasing funds to people they know nothing about using only the records clients have submitted to refer back to.
Still, despite their best efforts to evaluate an application , some funding companies still seem apprehensive because there’s a chance that the information they receive is at best incomplete, and at worst, outright fake, so there’s always some risk which means that the money released won’t be paid back.
To set the record straight, aside from looking out for themselves, capital providers are also looking out for you. There are some careless funders that have incurred losses and compensate for that by charging higher prices. By communicating effectively and being transparent, you will both get what you want.
Here are some tips for achieving the right balance of communication with your funding provider:
During the Application Process
As with a job interview, the application process is the stage where the funding company gets to know you. It is important to establish trust during this stage. Submit a complete package that meets all the funder’s requirements, including documents about your financial health and history, and even a plan of what you will do to the money.
Being transparent and removing any reason for doubt is the number one secret to getting a loan or capital advance approved.
Another way to keep lenders at ease is to use electronic tools that make it easy for them to review your submitted documents. Secure access to bank data with products like Decision Logic help funders get a clear picture of your financial data and to prevent fraud. Digital signatures on contracts speed up the verification process and make funders feel comfortable sending money your way.
During the Payback Period
After getting your loan or advance, don’t make lenders worry by disappearing without a word. Funders have hundreds, if not thousands of customers. An interruption in payments, while not uncommon, is still a significant issue that requires immediate resolution. The funding partner can’t tell from a daily ACH log whether the interruption is a one-time issue due to a bank error, temporary shortness of cash, or a willful breach of the agreement.
Make it easy for the funding company to reach you.
To avoid confusion, establish one email address that both parties should agree to use for all communications throughout the application process and after funding—and make sure it is a working email address.
Realize that funding companies can use online tools to research your email address during the application process. New or not often-used email addresses can show up as hard to verify, and thus can make a real difference in a funder’s decision. The best practice is to have an email address that’s domain-based (as in, your company’s), as opposed to email addresses that come from free sites such as Yahoo or Gmail.
Not only does this practice make you seem more open and transparent, but also works in your favor should an issue arise. Says Wellen’s Head of Customer Service Rita Dilworth, “When we can’t reach you, we can’t work with you to fix the problem”.
Final Thoughts: Why Communication with your Funding Provider is Important
Working with funding companies does not have to be difficult—all that’s required is transparency and open communication lines. Remember, your funding provider is risking their capital right alongside yours, so treat them like the valued partner they are.
At Wellen, we’ve worked with thousands of small business owners over the years, and we chose to bet on you and your business.
Ready to start the process of applying for funding? Get started on an application today!