Even if you have a bankruptcy in your past, you may still be able to get credit to expand your small business.This is according to Robert C. Seiwert, senior vice-president of the Center for Commercial Lending & Business Banking at the American Bankers Assn., who says in a BusinessWeek article:

Your best bet is to approach lenders at community banks who use traditional underwriting methods to evaluate creditworthiness. “The bulk of community banks evaluate your application by sitting down and talking with you, looking at your specific collateral and your cash flow,” Seiwert says. This is in contrast to most larger banks, which make loan decisions primarily through an automated credit scoring system—one that will likely cast you as a bad risk.

Sit down with a loan officer at a community or small regional bank and explain what happened in the property dispute, how you’ve rebuilt, and what you need now. Be up-front about the bankruptcy and what you did—if anything—to help maximize the recovery on your SBA loan.

“If you can show that you did your best to make good on your obligations after the fact, or that you intend to pay back that loan now that you’re profitable again, that will go a long way to restoring that chink in your character that the bankruptcy suggests,” Seiwert says. Asking a customer or colleague to make an introduction for you at a bank can also help, and if they are willing to co-sign a loan guarantee for you, that would definitely improve your chances.

Source: BusinessWeek