As a business owner, there may come a time when you need financial support from an outside source to keep your business afloat. If you're a budding entrepreneur, you may need a loan to get your startup off the ground. If you're already running a small business, a small business loan could help with company growth and expansion. There are various means of acquiring capital for a business. If you're considering a small business loan, you'd do well to get your credit history in order before putting in your application.
Your credit rating will play an important in getting approved for a small business loan. A good credit score will put you in a good position to receive a loan from a bank, credit union or other financial institution. In contrast, a low credit score or questionable credit history could thwart your loan efforts before you even apply. By taking time to review your credit history, you can get a better idea of your financial standing and take whatever measures are necessary to improve your situation before filling out your loan application.
You can check your credit score online by contacting any one of the major credit companies, i.e. Experian, Equifax and TransUnion. You can also order copies of your report by mail, phone or online.
Upon receiving your report, take time to review your history to make sure it's accurate and up to date. If your credit report is missing data or shows mistakes, notify your credit company right away. Mistakes in your report could lower your credit rating and jeopardize your chances of getting a small business loan.
Banks will use information on your credit report to qualify or disqualify you for a loan. Make sure all accounts on your report are valid and accurate. Closeout any inactive accounts that could have an adverse effect on your credit rating.
When it comes to credit, no one's perfect. At some time or another, you may have fallen behind in your payments which will be reflected in your credit history. Make sure you can give a reasonable account of late payments to your bank to alleviate any concerns they may have in approving your loan.
If you are currently behind in making payments or have accrued substantial debt, you may want to wait until you are in a better position financially to apply for a loan. You're more likely to get approved for a small business loan if you have a clean history that reflects a low debt to income ratio. The higher your credit score, the better terms you will receive on a business loan.
Small business owners face many challenges in growing their business. Financial management is often one of those challenges. If you need assistance managing your business finances, we can help. At Continental Tax & Accounting, we offer professional accounting services that can help you stay on top of your business finances and improve your bottom line. Contact us today for all your business accounting needs.
CONTINENTAL TAX AND ACCOUNTING SERVICES