Unsecured Business Lines of Credit Update: Very Important(Red Letter)

This came in Friday June 5, 2009:

Dear Joe,
(Special Note: The credit markets are showing signs of improvement since this email was released initially – but wanted to forward for your reference)


I thought it would be appropriate to address the issue of our economy with regards to our current business.  I’m sure I don’t need to tell you that our economy is experiencing the worst financial condition in many decades.  This has obviously affected the business credit markets, and of course, our ability to service clients.  With that said, I felt that it was necessary to address this subject with you as our ‘referral partner’.

Although there has been a steady decline in the mortgage and credit markets over the last couple years, our business was relatively consistent up until recently.
Over the last several weeks, we have witnessed a sharp decline in the amount of application approvals and/or significant reduction of approval amounts.  As with many in the business, we had expected the opposite to occur by now, and had been told by many of our lenders (in late 2008) that they expected the market to turn positively by early/mid-year 2009.  However, many of those same lenders seem to be ‘hoarding’ government bailout funds, or are simply not granting the credit at levels they were previously.
The market in general remains very cautious, and this has created a tremendous void in the business credit market.

In general, we HAVE NOT terminated our services to our clients.  However, we continue to operate on an EXTREMELY conservative basis.

PLEASE NOTE: Effective immediately, we have stopped offering our “Shelf + Credit” program, but with the expectation that we will again offer this program once the credit markets begin to loosen.  In addition, we have also reduced the expected ‘pre-approval’ amounts on “Credit Only” clients.

So what does this mean?
Quite simply, we will continue to service clients that seek UNSECURED, STATED/NO DOC BUSINESS CREDIT.
As of now, we can only service those clients that already operate an existing 2-year+ corporation, along with strong personal credit (700+ FICO).
In addition, I would like to stress to you that in almost all cases, the total approval amounts for most all clients will be well under $100,000 per client, regardless of credit strength.
Most clients (assuming strong credit profiles) will likely see $20,000 to $70,000 at best – total.  Along with this, the credit that we provide will be delivered as BUSINESS CREDIT CARDS, as many of the true business credit line providers have either discontinued this product or are reserving it for full-doc clients.
This is simply a factor of the current marketplace.
Currently, we view the primary candidate for our level of service to be existing business owners that are simply seeking working capital, and are not seeking a specific amount of credit.  In other words, clients that are flexible and understanding of the current market.
Please understand that we can only deliver what the market will allow.
With regards to our services, we ask that you please set the proper expectations with your clients.
At this time, please do not tell them that we can secure $150K or more in funding.  In addition, please expect turnaround times for client preapprovals and fulfillment to take a little longer than normal.
Since the credit markets are in a state of flux, we take more precaution with underwriting each client to properly determine a level of success.

As always, we sincerely appreciate your efforts.  We also thank you for choosing us to provide business credit services to your clients, and hope that you will continue to trust in us.

We will continue to monitor the business credit market, and will advise you when we feel confident that the market shows signs of improvement.
We will be making changes to our website to better reflect our current abilities.  Until then, please let me know if you have any questions. I thank you for your cooperation and understanding.



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