Get Funded! | Your Character

By: Ervin Hughes, Jr.

Managing Director at Rainstar Capital Group | President at Dominion Capital Management

Step #2 Your Character.
One of the primary keys to getting access to financing from a bank is to be sure that you’re aware that
as a business owner, you are a “public” figure. Lenders operate in a highly regulated environment
because of the critical role that banks play in our economic and monetary system. Most all lenders want
to lend money to businesses that are owned and operated by “good people.” When business owners
need to seek outside financing, lending sources often conduct character reviews as part of their due
diligence practice or process in their initial risk assessment.
What Lenders See as Character Indicators
Before you start looking to get financing for your business from a bank, do a self-assessment of your
character indicators. So to help you get started, here’s a few things that you can do to make your own
assessment.
1. Google Yourself – This is important to do first because you will want to know if there is something
in the public domain about you or your business dealings that could cast your character in a negative
light, whether it’s true or not.
2. Review Your Social Media Accounts – Have you made any public posts that contain emotional
rants, hate speech, or angry and belligerent language toward anyone or anything? If so, you might want
to consider tidying up any social media communications that may give a lender cause for concern.
3. Take Care of Tax and Social Obligations – For many lenders, business owners who are now or
have been unwilling or unable to equitably resolve tax issues can be a reason for an instant decline of
any application for financing. Some other character indicators may be categorized in other areas such as
social obligations.
This is when things like;
a. Defaulted Student Loans. To be clear, be careful not to confuse defaulted student loans with
deferred student loans. In this instance, student loans that are in deferment are not generally not
considered in default.

b. Delinquent Child Support. There are many business owners who pay child support. In this
case, paying child support is not a problem for most lenders; however, delinquent or defaulted child
support is a real indicator to most lenders that a character problem may exist.
4. Prior Criminal History – This is an especially sensitive subject to most lenders. Typically, lenders
handle these on a case-by-case basis, so they will generally want a written statement about the
circumstances surrounding any prior criminal history. So as a business owner, if you have “checkered”
past, be prepared to answer up front to the lender about any criminal history no matter how long ago

the infraction occurred. Occasionally business owners with common names can be victims of mistaken
identity. Be sure that if you have a common name and a lender indicates that they’ve found any
evidence of a prior criminal history and you have never had any such incident, be sure to ask them
where they got the information so that you can take action to protect your identity and clean up any
errors. Remember that court records are public, so you can start to search for yourself to see if any
public records show up on your personal or business credit reports and from there you can search your
local court records for free or at a nominal cost. To get started on this, you can visit
https://www.backgroundchecks.org or if you would like to scare yourself about how much information
is already out there about you, check out https://www.familytree.com
What’s the Goal?

Clean up your character indicators. Be prepared to answer prospective lenders openly and honestly
about any past or present issues or circumstances that could call your character into question. Prepare
and keep a signed and dated written statement handy to explain any prior criminal histories. Be sure to
remove any partners from your company that have any of these issues as well.
Want to Learn More?

Attend How To Make Your Business Bankable – Presented By: American Business TV at Small Business
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