Even after you have had your business for many years, you may find that when you go to get a loan, you are denied based on credit. The lenders are not looking at your personal credit in this case, but your business credit. Just like you have a personal credit score, so does your business. If you have not been working on this score, these are some tips to start building it.
• Ensure You Have Good Personal Credit. If you have absolutely no business credit, lenders will look at your personal credit as a back up. You will want to work on your score if it is not in the mid-600’s.
• Apply for Credit When You Do Not Need It. In the beginning stages of your business, you may not need credit but you should go ahead and apply for it so you can start building your credit. This will help you later if you do need to apply for a larger line of credit because you will have an established business credit history.
• Use the Credit You Have. If you are successful in getting business credit early on, continue to use it and pay it off so you can grow your credit even more.
• Develop Relationships With More Than One Lender. As a business owner, you do not have to rely on one lender. Develop relationships with multiple lenders so you have options when you need to get a line of business credit.
• Consider Alternatives. If you cannot get approved for business credit, you can consider other options until you can get your business score up. Some alternatives include private investors, crowd funding, and more.
Building business credit can take some time but it is worth it when you need a larger line of credit. For more information about business lines of credit, be sure to contact Liberty Commercial Capital.