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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.


What You Need to Know About SBA Loans

Categories: Finance Online
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SBA Loan Application Form

SBA Loan Application FormManaging a small business can be tough. You need to have enough funds to keep it afloat. Other than that, you need to deal with many expenses associated with small business management, such as buying equipment, funding your marketing campaign, and payroll for your employees.

When you need emergency funds, taking out small business loans can be an option. These types of loans, however, are different from the traditional ones. Wasatch Peaks Credit Union provides some helpful information about US Small Business Administration or SBA loans.

Where to Get the Money

There are many potential sources for small business loans. From banks, credit unions, to online lenders, the important thing is to know the interest rates they are offering and the payment terms available. Take note, however, that the Small Business Administration only offers resources and does not offer loans.

What are the Requirements?

Depending on the lender, you may need to provide certain information, such as the number of years you have been doing business or the purpose of the loan. For this, you will need a well-written and detailed business plan. It will include your personal information, goals and mission, projected cash flow and profits, and others.

How Will You Pay the Loan?

The payment terms will depend on the amount borrowed and the interest rate. Adding collateral may result to a better rate. Payment could either be monthly or in one lump sum. It is important to understand the terms of the loan before applying.

Are there Other Considerations?

When applying for a small business loan, you may need to submit a personal guarantee. For example, if you are not able to pay the loan, the lender may take your assets to cover the amount you owed. This will depend on how long you have been in the business, the collateral, or your credit history. Any default in payment could lead to a civil case, which could only be resolved by paying the debt or filing for bankruptcy.

Taking out an SBA loan can help keep your business operational. But it will entail a lot of responsibility and diligence on your part. Make sure you understand the terms and your obligations before applying for a loan.