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No one wants a surprise when they apply for a loan, whether it’s a personal loan or a business loan. Rather, the hope is that the process is smooth and ends with approval of funds. However, if you aren’t aware, a surprise is exactly what you might get when you apply for a loan and the lender decides to check your business credit.

Expect Lenders to Check Your Business Credit

Sadly, they don’t have to tell you they are going to do it either.  So, the safest bet is to just assume they will. The Fair Credit Reporting Act protects you from this type of surprise when it comes to personal credit. Yet, it only applies to personal credit. In contrast, anyone can look at business credit reports.

In fact, it’s almost always part of the underwriting process for business loans. Frankly, it’s just one of the many ways lenders mitigate their risk and determine the creditworthiness of the business.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

What Are Lenders Looking For When They Check Your Business Credit?

First, they need to see that your business is separate from you, the owner. Of course, they want to see that it can and will pay its obligations as well. Business credit reports are like a lender’s dirty little secret. They are made for bankers, not consumers.  Actually, many business owners don’t even know they exist. Yet, credit providers want to know it all, and they will look everywhere they can think of to find all the information they can.

Impact on Fundingcheck your business Credit Suite

Unfortunately, some lenders will deny funding if you do not have business credit. To them, that makes it look like business isn’t legitimate. In contrast, a business credit profile helps build trust.

Also, even if a lack of business credit does not affect approval, it may affect how much you get. Furthermore, it can affect terms and rates.

What Can You Do?

At a minimum, you need to be sure your business has a Fundable™ Foundation. This includes:

  • Separate contact information
  • EIN
  • Business bank account
  • And more!

In addition, you’ll need to build business credit. To start, work with vendors that will report positive payment history after you build your Fundable™Foundation.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

Credit Suite Business Credit Builder

The thing is, vendors that report are hard to find. Thankfully, as part of the Business Credit Builder, we offer an up to date list of vendors we know report. It is unfortunate, but not all of them do.  Also, it can be hard to figure out who does. As a result, the list saves time.

Check Your Business Credit Report Yourself

If you want to avoid surprises, this is vital. I menan, you need to know what lenders will see on your reports. In fact, the Business Credit Builder program can help with this as well. As part of the program, you can get copies of the reports you need. Even better, an expert business credit specialist will go over them with you. They can help you understand where you are, guide you as to how to proceed.

Now, another option is stand alone monitoring. Of course, you can do this with each agency directly. But, with us you can monitor multiple business credit reports at a fraction of the cost.

Honestly, monitoring your business credit is the only way to know who’s reporting and when you can apply for more accounts.

Build a Business Credit Portfolio

A business credit portfolio is a cash flow pool of sorts. It includes all the different types of credit accounts you have. So, it is the total of all:

  • Vendor credit
  • Business credit cards
  • And business loans

In the end, a strong business credit portfolio allows you to even out cash flow, leverage business credit for growth, and keep going during tough times.

Don’t Neglect Personal Credit

Business credit doesn’t take personal credit out of the picture. Remember, lenders will look at everything. Personal credit can impact business credit.

Experian and FICO SBSS use personal credit in their business credit score calculation, and most traditional lenders will check both anyway. Still, if you have good business credit, they may not put as much weight on personal credit.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

Be Prepared for Lenders to Check Your Business Credit

Lenders will likely check your business credit. Consequently, all you can do is be sure it is as strong as possible. Let us help. Find out more about building business credit now.

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