Before the pandemic you were able to apply for a business loan with just using your established business credit and profile. Now, some lenders requires the owner’s fico score and credit profile. However, there are others that just need the owner’s personal score and then the business credit profile. There are very few who will take only the business credit profile. Did you know that your Experian Business Credit profile and score consist of your personal credit and business credit combined ? Vendors check your Dun and Bradstreet profile, with them you can establish business credit and a paydex score. Your profile shows if you have vendors and tradelines being reported. With the economy in the state it’s in, there’s rarely lenders who want to lend to startups. Some requires at least 3 months of business bank statements at least 6,000 or more in deposits. Also , you can have the FICO score requirement but will need the monthly revenue requirements to qualify for certain business loans.
So here are the things to consider and review before you apply for a business loan.
- Have you Been in business for over a year ?
- Can you produce 3 months of business bank statements ?
- If your FICO score ranges 500 – 649, do you have at least 10,000 and up in monthly deposits ?
- Does your credit report shows Good Payment History ?
- Does your credit report shows low credit card utilization rate below 20 %
- Is Your Business Credit paydex score at least 80 and Experian 580 ? ( you are considered low risk)
- Do you have proper record keeping where you can produce profit and loss statements or business tax returns (if needed) ?
If you do not meet any of the requirements above here are things you can do to get prepared.
- Open a Business Bank Account ( you will need EIN letter and Secretary of State filing)
- Deposit money into your Business Account
- Open a Business Credit building Card with Expense management. Some of these aren’t credit cards, they more like banking that will help build your credit and will report as a tradeline. I suggest putting your business monthly expenses on it and it will report the payment history.
- Open a Business Credit card. If you can’t get one with your bank, try other options like Capital One Business Credit card options. Again, I suggest put your monthly expenses on it and then pay it off.
- Open a vendor account, like with Quill.com, Uline.com, Office Depot, or Staples for example.
- Use apps like Nav.com to help build your business profile. If you choose the Business Booster plan (like $39 a month) , it will report the payment like a tradeline. Also help you get qualified for business loans.
- Manage your business income and expenses with proper accounting and bookkeeping. Where if a lendor or even an investor needs to see a financial statement, you can produce it.
These are our tips that has help small businesses such as myself and our clients obtain loans to help expand and grow their business. If you need more guidance or assistance obtaining business loans. Please feel free to contact us at firstname.lastname@example.org or 678.667.7988 Our Consultants are ready to help !