According to recent reports, as many as one third of applications for business loans are denied. If you find yourself as part of that group, there are some things you can do to help the situation. The first thing you need to do is try to determine where the problem is. Possible areas of concern may include: ● Your business profits. Does your business have a healthy profit margin? Improving your profits by reducing and trimming down the operational excess and unnecessary business spending can help improve profits and boost your chances of getting approved. ● Your business assets and liabilities. If your balance sheet is out of whack, most lenders will run the other way. If your business is already heavy on debt, then this will be an area of concern that you’ll want to address. ● Your payment histories and business credit profile. Obviously, how you are paying your existing obligations will play a role in your approval or denial for credit. If you’ve been denied business credit recently, check your Paydex and other payment performance data and make adjustments as necessary. ● Most payment experience data is only reported for 2 to 3 years (depending on the credit bureau), so if you’ve made a mistake or hit a bump or two in the road, don’t let it worry you. Just keep the positive payment history building, and make sure what is being reported to date is accurate. ● Your bank ratings. If your business bank account balances are habitually low, this can actually rule you out for certain types of business credit. Try to maintain $10,000 or more in your business bank accounts to avoid trouble. The bottom line, if you’ve been denied credit, is that there is something about your business that makes it appear to be a bad risk. Your job is to analyze and understand your business credit report and business finances, determine where the problem is, and take the necessary steps to correct your course. Sometimes the lack of history or data on your business will be a key factor in a credit denial. This is something that can be easily remedied by taking careful steps to shape your business’s financial picture and credit profile. We write these articles and share this information because we want to help business owners get access to funds without risking there personal credit and finances. We guarantee our clients $50,000 in business credit no linked to there SSN or Personal guarantee. However we do not work with everyone. We only work with business owners who have an active corporation, business address and telephone number. If you know someone who qualifies and needs help please share this article and download a free e-book from www.BlessingCapital.biz Author & Expert Advisor: Joshua Daniel Blessing Down Load The 9 Most Devastating Mistakes For Free by clicking the link below- www.BlessingCapital.biz 5 FACTORS THAT AFFECT YOUR BUSINESS CREDIT What makes up your business credit score? What gives you the best chances of getting a loan? Here are a few factors that play into your business credit picture, and what you can do to make the most of them: 1. Payment History - Your payment history is an important part of your business credit profile, and is what your D&B Paydex score is based on. Many credit opportunities come with a minimum Paydex requirement. What you can do: always pay vendors EARLY. On time is “okay”, but paying early (as in before you receive the invoice) is best. 2. Credit Applications - Believe it or not, multiple applications for credit can be a red flag that will keep you from getting approved for a loan. Too many in a short period of time will make your company look desperate and be a sign to potential lenders that things are going downhill. What you can do: plan your use of credit accordingly, and keep applications to the minimum necessary to accomplish your goals. 3. Blanket UCC Filings - One thing that many people don’t realize is that they need to pay attention to the order in which they get certain types of loans, and what UCC filings the lenders will file. Some lenders may file a “blanket” UCC filing, which essentially says they have an interest in ALL of your assets. These blanket UCC filings will then take precedence over any subsequent ones, which drastically reduces your ability to get credit elsewhere. What you can do: plan your credit carefully, and negotiate UCC filings according to what your needs are. For example, if you need particular assets excluded from a UCC filing to use as security for another loan, explain that fact in advance to get those items excluded from any blanket filings, or, alternatively, get the loan or account with the more specific UCC filing first. Some experts recommend opening accounts with competing UCC filings at the same time, and negotiating the details with each party simultaneously. 4. Company Financials - With D&B, it’s important to make sure your financials in your credit file are up to date. If they are not, it could negatively reflect on your company when the lender is comparing the available data. What you can do: update your financials on your credit reports so that they reflect your current circumstances, and plan to do so periodically. 5. Company Legal Structure - The legal structure of your company (LLC versus INC versus Partnership, etc.) can also affect your business credit. Lenders are less likely to loan money to Sole Proprietorships and Partnerships than Corporations or Limited Liability Companies. What you can do: if you aren’t incorporated, you should be. The advantages span far past just your ability to get credit. There are other factors that affect your ability to get credit, such as the amount of debt you already have, how heavily invested you are in your company, and even your personal credit can play a role in your approval or denial. Here we’ve covered five of them. In the end, the better the all-around picture you can paint, the better your chances of getting approved for loans will be. Need Money for your business? visit www.TheALIVEAcademy.com
A lot of people don’t understand the consumer credit system, and many more don’t understand the business credit system. Today I’m going to cover a couple of common business credit “myths”, and explain the truth that can be learned from them.
Myth #1: Business Credit is Just Like Personal Credit This sounds like it ought to be true, but it just isn’t. Sure, the credit systems are similar. However, there are some very major differences that can seriously affect your business. For starters, the consumer credit system has, both in court and in congressional testimony, been demonstrated to be fairly anti-consumer. The system works against consumers in many cases, is prone to errors, and tends to resist the correction of any errors by consumers or their advocates. (In one example, even after a credit bureau was sued and lost in court, they continued to refuse for months to remove the incorrect information from the person’s credit reports.) The business credit system is quite different. It is not anti-business (or anti-consumer), it is less prone to errors, and when there are legitimate errors, they are generally easier to get corrected. Myth #2: It Doesn’t Hurt To Use Personal Credit In Place of Business Credit This is a problematic way of thinking that can lead to big problems down the road. Using personal credit for business purposes puts your personal credit at risk for the sake of your business. By using personal credit for business, you limit the resources available to you personally and to your business, and the end result could be disastrous. Imagine when your business credit needs exceed your personal credit capacity--and when YOU need to use your personal credit and can’t because it’s been tied up by your business. No matter how you spin it, in the end using your personal credit for business is a bad idea. Myth #3: Business Credit and Personal Credit Are In No Way Related While using your personal credit for business use is a bad idea, we can’t exactly separate business credit and personal credit completely. In many cases, especially when starting out with business credit, an owner of the company will be required to provide a “personal guarantee” for the business credit loan or line of credit. When providing a personal guarantee, the company extending credit will not only check your business credit, but will check your personal credit history. While the business account won’t show up on your personal credit report, the personal guarantee could eventually affect your personal credit in the event that the business fails to meet its obligations. Obviously, you should aim to avoid that scenario (and certainly can) by careful planning and smart use of business credit. Author: Joshua Daniel Blessing- Visit www.BlessingCaptial.biz for your free E-Book What Every Business Owner Needs to Know About The Dun and Bradstreet Business Credit Score5/19/2016
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