What’s the challenge getting a small business loan from the bank?
Lets look at it this way. You and I both know that your business is worth the risk for you, right? BUT is it worth the risk for the bank? That’s the $64,000 question. And to answer that we have to look at how your business ranks relative to all the businesses that do what you do and then how does that stack up against all the other business that are looking for business loans. And then you have to see if your bank likes your business and the industry. It’s enough to make your head spin.
As you separate your personal and business credit (and you build your business credit the right way), you’ll find more and more that you can get the banks to say, “YES” when you ask them for a small business loan.
Are you a start-up? No revenue? No worries. You can and will be able to build credit in your business, however, only if you follow the proper steps. You’re thinking, “I can do that”, right? However, just because you do it right doesn’t mean a traditional bank is going to pat you on the back and offer you a small business loan. In fact the pat on your back or the one you feel on your fanny as you walk out of the bank may just be them giving you the proverbial boot…
How about if we take a look at using your assets or collateral to build up your business credit. Why not use those assets as collateral for obtaining some new business credit accounts? Just a thought. You never know, it just might open up some interesting avenues. Here’s the deal. There are small business loan funding programs based on revenue that can be pledged as collateral. Why not use it? Using it to leverage your finances for business purposes may just be the ticket to some working capital or that small business loan you desire. Plus it may accelerate the business credit building process.
Now while I’ve been railing against using personal credit for business purposes and stressing that you must separate the two, the reality is that your personal credit does play a critical role in your ability to secure a business loan. All I’m suggesting is that you can take advantage of a good personal credit score. In the world of getting approved for a business loan your personal score can make the difference. Yes, you will be able to secure vendor lines of credit, credit cards, vehicle leases (less and less) and other types of financing using only business credit. Here’s the truth. Most business credit building services won’t or don’t like to talk about this.
OK, so what’s the score? 7-2-0. That “FICO” line hasn’t moved at all over the past 10 years or so. Maybe a little lower maybe not. I could talk for another hour or two just on this subject but I’ll spare you. Just remember that by improving both personal and business scores will make much more money available to you and you’ll get business loans with better rates and better terms. These may be secured small business loans or even unsecured business loans. You can always visit Sunwise Capital and we can help you through these muddy waters and get you the business loan you need today.
Apply for a Wright Express Fleet Card (http://www.wexinc.com/fleet/small-business/) and the Fleet One Small Business Card (http://www.fleetone.com/) These cards can be obtained without your SSN# as a secured card. Secured or unsecured these cards report to the business credit agencies.
Apply for a Chase Ink Business Credit Card and AT&T Universal Business Rewards Card. Bear in mind that there are pro’s and con’s to applying and there are minimum requirements based on revenue, personal credit and approval amounts but they were both “unsecured”. They may or may not report to business and or to your personal credit bureaus. The advantage of the Chase card is that it’s invisible reporting to neither personal or business credit agencies.