Sounds simple, well it’s. First, know who your investors are. If you’re searching for a small company loan you’re probably likely to approach a financial institution. A financial institution will give you credit as well as your business and get, “is that this a great investment for all of us to loan them money”. They take a look at their criteria of figuring out risk making a decision to proceed with approving the loan request or otherwise.
So again, understanding what the financial institution is searching for is essential. Every bank has their own system for figuring out financing approval. More often than not you’ll need a good personal credit rating, a minimum of 2 yrs running a business along with a business credit profile. You decrease your risk being an investment for that bank the more you’re in business, the greater your individual credit rating is and also the better information you’ve in your business credit history.
When trying to get credit you’ll find some banks pay a lower personal credit rating then others. Banks have a range of three Credit Agencies to buy your credit history from. Each Credit Agency have a different formula to find out your credit rating, which means you really have three different personal credit ratings.
We lately were built with a client get a $50,000 unsecured business credit line after applying by themselves at two banks and never receiving an agreement. We could help this client because her personal credit rating with Equifax would be a 633, while at Experian she’d a 685. Banks she visited bought the Equifax report so we sent her to some bank that purchased her Experian report. Getting the understanding of the credit ratings from each bureau can help you decide if you’re able to obtain a business credit line or otherwise.