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How to Increase Your Ability to Get Business Credit Today

August 23, 2016

Have you ever had to pass up a lucrative business opportunity, or a chance to grow your organization, simply because you weren't able to raise enough funds? If so, you are not alone. This is a dilemma that's regularly faced by many entrepreneurs across the country, and it can give rise to a lot of frustration and helplessness. However, what most individuals don't understand is that this happens because they tend to apply for credit without knowing what elements are most likely to impact their ability of getting a business loan.

In order to ensure that you never have to go through such a predicament, we've compiled a list of factors that determine the availability of credit and finance for small and medium sized businesses.

  1. Personal FICO scores and Credit Reports: Strong FICO scores (720 and above) give a quick summary of your creditworthiness to lenders, thereby providing you with access to great funding options, such as unsecured business credit lines, business loans and SBA loans. On the other hand, your personal credit report is used by lenders to better understand the kind of credit you use, the amount of time your accounts have been open, and whether you've consistently paid your bills on time.
  2. Business Credit Score and Credit Reports: Many lenders and banks use business credit scores and ratings such as PAYDEX®, D&B Viability Rating, Credit Score or FICO SBSS Business Score to make small business credit decisions. Meanwhile, business credit reports reveal important details to lenders, such as the company's background information, financial data, payment trends, insurance premiums and public filings.
  3. Business Plan: A business plan that includes the entire set of projected financial statements, such as cash flow, profit-and-loss and a balance sheet, is often demanded by lenders to support the application for a commercial loan.
  4. Credit Card Sales: Businesses can obtain funding on the basis of their credit card sales by evaluating options such as merchant cash advances (purchase of a fixed dollar amount of a business’s future credit and debit card receivables).
  5. Outstanding Invoices: Instead of waiting months for customers to pay, a business can get cash for outstanding invoices through factoring (selling its accounts receivable, or invoices, to a third party commercial financial company, also known as a "factor").
  6. Open Purchase Orders: Many lenders provide capital for verified purchase orders – this enables organizations to honor large commitments without putting a strain on their cash reserves.
  7. IRA & 401K Investments: If you have an IRA or 401 (k) investment, you may have to shell out huge taxes or fines for early withdrawal of funds. In such cases, alternative funding solutions such as a business directed retirement account can save you thousands of dollars in penalties.

In order to improve your chances of getting a loan for your business, you should additionally ensure the following:

  • Make sure you build up a great payment history by paying your vendors early, instead of simply on time, as this forms an important part of your credit profile.
  • Avoid multiple applications for loans within a short period of time, as it tends to send a signal that your company is in trouble and needs funds desperately. A good approach is to plan credit use meticulously and keep applications to the bare minimum.
  • While granting a loan, some lenders tend to file Blanket UCC Filings, which states that they have an interest in all of your assets. Such filings may reduce your ability to get credit elsewhere. Thus, before accepting such a loan, ensure that you negotiate the UCC filings as per your needs – this will allow you to apply for other lines of credit, if required.
  • You should update your company financials periodically – not doing so may reflect poorly on your company when a lender is evaluating all available data. Additionally, you should incorporate your company, if you haven't already done so. Lenders are more likely to loan money to Corporations or Limited Liability Companies than Sole Proprietorships and Partnerships.

Fast Tracking Business Credit

Small companies who go it alone can often come up with $10K to $40K, with reasonably good terms. But there is a better, faster, fully guaranteed way! Fund&Grow has an innovative solution to get up to $250,000 for your business – typically in a matter of months. Fund&Grow maintains strong relationships with leading lending institutions and they leverage highly-researched credit card offers – with special strategies to get approvals for those offers. As a result, most of this funding will come at little to no interest for 12-18 months. Moreover, there will be no impact on your personal credit. For more information or to get started, contact us via our website or call today at (800) 996-0270.

I take tremendous pride in building positive and lasting relationships in my businesses and personal life. Every member of my team is committed to helping our clients get the maximum amount of funding possible and achieve their highest growth potential.

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Our business experts are available to answer questions Monday - Friday from 9:00 a.m. - 6:00 p.m. EST

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(800) 996-0270

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