How Does Your Business Credit Affect Getting a Bank Loan
Just as an inefficient product or service can affect sales, your business credit can affect your ability to get a bank loan. You should learn more about this topic to position your company for maximum success.
What are the Differences between Business Credit and Personal Credit?
There is a difference in personal credit and business credit history. Commercial banks use both when deciding whether they will approve you for a business bank loan or a line of credit.
Business credit usually comes from companies like Dun and Bradstreet whereas personal credit usually comes from companies like Equifax. Banks will look at both to determine if you are credit worthy.
Why is Business Credit So Important?
When a bank runs your business credit it shows:
- If you haven’t paid your bills on time
- Any law suits that have been filed against you
- Whether any other lending institutions have liens against your company
- What your yearly revenue might be
- Information about your industry
- When you started you company
- The names of the owners
- Previous names of the company
- How much immediate business funding they would recommend you be approved for
- How many employees you have
With this insight, they will give you a rating.
How is a Personal Credit Check Different from a Business Credit Check?
- Your score is based on their formula
- A good score is 650 or better. If you have a score of 750 or better, that is excellent.
- The report will show your payment history, collections, defaults, how much money you owe, and credit card balances.
All this shows how much available credit you have.
How Does Financing Solutions Look at Business Credit
- Financing Solutions (www.financingsolutionsnow.com) does not run a personal or business credit background check until after you sign their offer letter.
- Their written offer letter will come soon after you complete a two minute, very simple application.
- They do not ask for a personal guarantee (except in cases of fraud).
How Can You Get a Line of Credit from Financing Solutions?
For their line of credit product they will look to see if you:
- Have a personal credit score greater than a 620.
- Are earning at least $300,000 or greater in yearly revenue
- Maintain a good debt verses revenue ratio.
What Are the Benefits of a Business Line of Credit from Financing Solutions?
- You do not need personal collateral for their line of credit.
- It costs nothing to set up and costs nothing until you use it. In fact, if you pay it off in 48 hours or less, there is no cost whatsoever.
- Their line of credit is specifically made for small business financing and nonprofit help.
Ways to Boost Your Business Credit
Check your credit score. This way, you can see which activities are having a negative effect on your score. You can also dispute anything that’s wrong in order to remove it.
If you have a history of positive payments with a long time supplier, establish a credit account with them. The more good news on your business credit report, the better you look.
Get fast business funding from Financing Solutions. This will help you to pay your bills on time, which also boosts your score. Every business should have a Financing Solutions line of credit in place, just in case.