You have a plan to expand your business, but you need financing. But you’ve never gotten a business loan before, and you’re a bit concerned you might be turned down.
Tips for Getting a Business Loan
Fortunately, there are 8 secrets to boost your credit attractiveness and improve your chances of getting a business loan on favorable terms. Here are two:
Secret #1: Yes, You CAN Improve Your Personal Credit Score
One barrier to getting a better business loan may be a low personal credit score. Increasing your score is easier than you might think. Here are just some of the tips:
- Pay down your credit cards. As a yardstick, you’ll want all your cards under 50 percent of their limits. This means no more maxing out cards — for personal or business.
- Lower your debt compared to your income. A good benchmark is keeping debt to 30 percent of less of your income. Rather than taking a second mortgage on your home and increasing your debt load, you might be better served to apply for a business loan.
- Monitor your credit score. Errors are more common than most people realize. Besides you’ll learn which creditors report to credit agencies and what they report on.
Secret #2: Your Business Credit History May Be Incomplete, But It’s Not Hard to Change That
Does your small business have an established credit history? You’d be shocked how many don’t, or they have an incomplete history. Once again, you can take action to flesh out your business’s credit history:
- Establish free profiles with the three major business credit bureaus: D&B, Experian, Equifax
- Apply for a business credit card and use it to establish a timely repayment history.
- Do business with vendors (“trades”) that report to credit bureaus regularly.
Learn 6 more secrets, and many more specific tips, in the webinar “How to Improve Your Business Credit — and Get a Better Loan”.
The webinar takes place Wednesday Dec. 6, 2017 3-4 p.m. EST. The webinar features Rohit Arora, Co-Founder and CEO of Biz2Credit, the small business loan marketplace that’s arranged over $1 billion in loans. He will be joined by Entrepreneur and founder of Small Business Trends, Anita Campbell.
BONUS: If you register for the webinar, you also get a free copy of our companion ebook, How to Improve Your Chances of Getting a Small Business Loan.”