With the new credit card law slated to go into effect in February 2010, banks will no longer be able to issue credit cards to anyone under 21.  Students able to prove they have the independent means to pay will be issued a card.  So if students can’t get a credit card how do they build a credit history? Here are three ways cited in a recent Wall Street Journal article:

• Use a Debit Card to teach your child to charge only what is available in the account. He or she can graduate to a credit card after developing good habits.
• Make your child an Authorized User of one of your credit cards.  The payment history then appears on the child’s credit file.  This means you have to be a responsible parent when it comes to your finances.
• Use a Secured Card which requires a cash deposit be held at the bank and creates a “credit-limit” for the card.

Anyone of these methodologies or a combination will help you educate your teen while protecting your own credit history.

The Wall Street Journal recently ran an article that stated the 90% guarantee program currently in place will run out by the end of November or December.  Since loans can take up to 120 days to be approved speed is of the essence.

Here are ways to speed up the process.

• Make sure your financial statements are up-to-date. Make sure the projections show you can pay everyone back.
• Write or update your business plan.
• Write or update your marketing plan.
• Use an SBA preferred lender even if they aren’t your current bank.
• Make sure the preferred lender works with your type of business.  You don’t need educate the lender while time runs out. If you are just starting up the SBA will not guarantee a loan to you.
• Consider scenario planning and apply for loans with several banks.
• Bank’s want you to mitigate their risk.  Consider making a higher down payment or, and this is not a favorite of mine, a personal guarantee.
• Consider tapping the advice of someone who is used to putting this type of  loan application together.  Find the local Small Business Development Center or SCORE office.  If you are in Boston, MA or Providence, RI you can get help from the Center for Women & Enterprise (and yes men are welcome and even helped!).

Time is awasting if you want this type of loan.  Hesitate and you will be back to 75-85% guarantee levels and having to pay fees.