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5 Ways to Strengthen Your Business Credit

Categories: Finance Online
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small business loan application with authorized stampAre you considering applying for a small business loan? Lenders are likely to check your credit history and a strong business credit score may increase your chances for approval.

To become more eligible for a small business loan in Ogden or any other place in Utah, you must build your credit in the following ways:

1. Boost Your Personal Credit Score

Your personal credit rating may influence your business credit rating. Pay your bills on time and maintain a low ratio of debt to credit on your credit lines and credit cards. The same goes for your business partner or major investor.

2. Operate Like a Business

Mixing your personal and business expenses won’t help your business profile and may hurt your personal credit. Consider incorporating the business as a limited liability company. Open business bank accounts and pay all business expenses with the company’s credit accounts.

3. Prove Your Company’s Credit Worthiness

Before they loan you a big amount of money, lenders may want to see your lending history. To build your profile, borrow small and pay on time. Work with suppliers and vendors on credit, use your business credit card, and apply for small bank loans. These lenders can serve as your credit references down the line.

4. Grow Your Credit and Use It

After establishing a payment history, increase your credit limit strategically. But remember to keep a favorable credit utilization ratio, preferably about 30 percent. Maxing out your credit cards shows that you’re unable to pay your bills.

5. Watch Your Credit Profile

Your business credit profile needs to be correct or else your building work will be in vain. Check the report for mistakes and raise any issue promptly. In addition, make sure the report is up to date.

Potential lenders may reject your business loan application if you don’t have a good business credit score. Luckily, there are ways to strengthen your business credit. Build your credit score and improve your odds of getting approved for an affordable small business loan.


The Most Popular Uses of Small Business Loans

Categories: Finance Online
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SBA Loan Application

SBA Loan ApplicationA small business loan is ideal for funding purchases that you need to make for your company. You can use the loan for anything that your business may require for smooth operations.

Some of the more common uses of a small business loan in Ogden include:

  • Inventory
  • Equipment
  • Employee Wages/Benefits
  • Expansion

Not all companies need additional capital for all these categories, but most businesses will need extra funds for one or two of them.

Inventory

If you sell products, it is important to have the goods in stock. A business loan can help you buy your inventory or the materials to create your products. You must have a detailed plan to sell your inventory. Otherwise, you may end up with a huge amount of unsold products and a big debt on your shoulders.

Equipment

Your business may need equipment to facilitate your production process. If you don’t have enough funds yet to buy the equipment, a small business loan will come in handy.

Employee Wages and Benefits

If you are in the business of providing services instead of products, you need well-trained manpower. This will facilitate the delivery of your services to clients. While you can get a small business loan to pay your employees, you need to have a clear plan on turning your employees’ productivity into revenues.

Expansion

If you need to expand your business even if you have already reached a certain level of success, you may need extra funding to get your expansion plans rolling. Armed with a good business plan, you can apply for a small business loan and get the cash you need for your expansion project. Once you start reaping the benefits of your growing business, you will not have much difficulty in repaying your loan.

If your start-up or small business needs additional operating funds to keep afloat in today’s highly competitive business environment, you can always apply for a loan. Look for a lender who offers great deals and competitive rates.