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Published By Janet Gershen-Siegel at April 11th, 2018
Are you an effective business credit builder? Being a small business credit builder means your small business gets opportunities you never thought you would. You can get all-new equipment, bid on real property, and cover the company payroll. And you can do so even when times are a bit lean.
This is specifically helpful in holiday business enterprises, where you can go for several months with only minimal sales.
Given this, you ought to focus on developing your business credit. Boost and maintain your scores and you will have these possibilities. Do not, and either you do not get these chances, or they will cost you a lot more. And no business owner wants that. You have to recognize what affects your business credit before you can make it better.
Late monthly payments will affect your small business credit score for a good seven years. If you pay your business (and personal) financial obligations off, as fast as possible and as fully as possible, that’s great.
Then you can make a very real difference when it concerns your credit scores.
See to it to pay without delay and you will enjoy the benefits of promptness.
This is in a nutshell the length of time your small business has been using business credit. Needless to say newer small businesses will have brief credit histories. Although there is not a lot you can specifically do about that, do not stress. Credit reporting agencies will also consider your personal credit score and your own history of payments.
If your personal credit is good, and in particular if you have a reasonably long credit history, then personal credit can come to the rescue of your business.
Normally the converse is also true. So, if your individual credit history is bad, then it will affect your business credit scores until your small business and personal credit can be split.
Are you having a bad business year? Then it could land on your consumer credit score. And in the event your business has not been around for too long, it will directly have an effect on your business credit.
But you can unlink both by taking steps to split up them. For example, you can get credit cards just for your firm, or open business checking accounts and other bank accounts. So, then credit reporting agencies will start to address your consumer and business credit separately.
Also, make sure to incorporate. Or at least file a DBA (doing business as) status. You can also take care of your expenses with your business credit card or checking account. And make sure it is the small business’s full name on the bill and not yours.
Credit utilization rate just shows the amount of money you have on credit. So it is then divided by your total available credit. Lenders generally speaking do not wish to see this exceed 30%. So, for every $100 in credit, do not borrow on in excess of $30 of that.
If this percent is increasing, you’ll have to spend down. And pay off your financial debts before borrowing more.
Just like every single organization around, credit reporting agencies just like Equifax and Experian are only as good as their information. If your business’s name is like another’s, or your name is a lot like another entrepreneur’s, there can potentially be some errors.
So, monitor those reports, and your business report at Dun & Bradstreet, PAYDEX.
Stay on top of these reports and contest charges with records and clear-cut communications. Do not just allow them to stay wrong! You can fix this!
And while you’re at, it you should also be keeping an eye on the credit reporting agency which only handles personal credit. That is TransUnion. If you do not know exactly how to pull a credit report, do not worry. It is easy. Just use the above links.
Our Credit Line Hybrid program is perfect for entrepreneurs who are just starting their business as well as those who are already well established. You can be approved for up to $150,000 in 0%, unsecured, no-doc, business funding with no collateral or cash flow requirements.
This program is designed to help clients get funding based strictly on personal credit quality. Our lenders will not ask for financials, bank statements, business plans, resumes, or make any of the other burdensome document requests that most conventional lenders demand.
This program is as close to a “no-doc” program as you can get with business funding. And the best part is that you can even be approved with introductory rates as low as 0% giving this program the best terms in the country.
Our Credit Line Hybrid program is extremely popular due in part to how easy it is to get approval. To qualify lenders will look just at your or your credit partner’s personal credit quality. They are looking for very good personal credit with no derogatory items reporting.
Our lenders will review the credit report to ensure there are no derogatory items on the report. To get approval you shouldn’t have any open collections, late payments, tax liens, judgments, or other types of derogatory items reported.
To qualify you should also have fewer than 5 inquiries on your credit report within the last 6 months. You should have established credit including open revolving accounts now reported on your credit report with balances below 40% of your limits. And lenders typically want to see personal credit scores of at least 680.
If you have good credit there is a good chance you can be approved for our Credit Line Hybrid. But even if you have personal credit issues now and no established business credit, we still might be able to help.
You can qualify for our Credit Line Hybrid program with a personal guarantor. If you have someone like a business partner who has good personal credit, they can apply and qualify for unsecured financing for the business.
Our collateral-based financing programs are perfect for consumers with personal credit challenges. You can get approved with great terms and get approved even with severe credit issues. You can also qualify for financing with us if you have been open more than a year and have active cash flow for your business now.
Our Business Credit Building Program can help you quickly establish a business credit profile and score so you can qualify for unsecured financing based on your business credit. We even work with a powerful network of credit improvement specialists who can help you repair your personal credit damage.
Most lenders charge very high interest rates on unsecured financing due to the risk of the business owner not pledging collateral for security. But most of our exclusive unsecured financing offers very low initial intro interest rates, as low as 0% for the first 6-18 months. Rates typically range from 5%+ after the intro period. But the actual rate will depend on risk.
Most unsecured lenders also charge high amounts of points ranging from 12 – 30%, and they also charge application fees for Credit Line Hybrid financing programs. But our exclusive lenders offer the lowest fees in the industry, ranging from 9 – 12%, and you only pay a fee if you are approved and have gotten your funding. Pay an interest rate of 5 – 29% after the initial period.
You can get approved for as much as 5 times whatever your highest revolving credit card limit is now.
Use a guarantor or a credit partner to up the numbers; often these people want a piece of the business in trade for their help. Creditors want to know you’ll pay them back. Most sources will charge 9 – 12% success-based fees. Only pay the fee off what you secure.
Pay an average of 10% on the amount you borrow. Lenders on all loan programs charge fees; you easily pay 5% or higher even on an SBA loan. But this program, like most others including the SBA, “roll-in” your fee. So you don’t pay up front. Once you get your cards, the fee is invoiced; this is one invoice per card.
Responsible credit management is a must. Always use credit responsibly! Don’t borrow more than you can pay off. Keep track of balances and deadlines for payments. Paying on time and in full does more to raise scores than nearly anything else.
Once you find out what has an effect on your business credit score, you are that much nearer to developing improved business credit. Learn more here and get started toward building business credit attached to your business’s EIN and not your SSN.