From collateral alternatives to questioning if there is a "magic formula" to determine loan approval, Phil Bryan, senior vice president of retail and lending at Metro Credit Union, shared his insights during a Twitter town hall this afternoon.
Hosted by Intuit, the Twitter session focused on small businesses and their access to credit. Bryan was a part of a panel of experts. When asked about advice to entrepreneurs in helping them decide the right type of loan, Bryan said depending on if it is a term loan or line of a credit, "ask the question 'can I repay this in less than a year.'"
"You need cash flow in either situation, but a term loan is generally easier because it is principle and interest and secured," Bryan said.
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Someone asked if credit unions are financing startups without real estate collateral. Bryan said it would typically depend on the credit union, however, "Pure start-ups (not purchase) are generally discouraged unless well-secured."
That magic formula for deciding if a loan gets approved? Bryan said, "The three legs of the stool-credit, collateral, cash flow."
But "relationships still play a big role. If you always pay your [credit union first], they are more likely to stand by you in tough times."
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