Print   RSS

Is Your Business Loan a Credit Report Away?

Dave Thomas

February 12, 2015

Being a small business owner can oftentimes mean long hours and many tough decisions.

When you run a small business, your over-riding priority is making sure your company is and remains financially sound. Without the proper finances in place, tasks such as paying employees (if you have them), marketing and advertising your company, and paying off your bills (everything from office supplies to office utilities) can become a challenge.

For many running small businesses, there will come a time when you will need to either tap into savings or put your hand out for a small business loan in order to maintain your company. If you opt for the latter, do you know how important your credit score and credit history are?

Do Your Numbers Add Up?

In order to properly seek a small business loan, it is important that you review your current and past financial history, looking to see if there are any potential red flags that could stymie you from getting that loan you desire.

For starters, make sure you know and understand your credit score and credit history.

Whether you go through a provider such as CreditSesame.com or others like them for your credit report, you will get the information you need to see if you stand a good chance of acquiring the desired loan.

Small business owners can get a full review of their credit profile and debt status, along with details on how to save money on loans and credit card debts. Remember, many loan providers (including banks and credit unions) have tightened their loan guidelines over the last decade, so getting a loan takes some effort.

If your small business has been “leaking” some money in recent times, there are a number of ways to tighten up this problem and over time improve your credit score.

They include:

• Billing – Whether they are bills you send out or bills you receive, make sure you’re up to speed on your invoices (late payments will definitely impact your credit score/report). It does not take long for some small business owners to fall behind on their payments to creditors and before you know it, they’re seeing red. If handling your billing is becoming too cumbersome for you, take the time to hire a full or part-time accountant. As for your invoices, make sure you are billing your clients on time so that they are not lagging behind in paying you for your services;
  
  
• Wastes – Every small business owner has areas that he or she can cut to lessen their financial burden. Look around and see where you may be essentially throwing money out the window. Whether it is with too many office supplies or using up too much electricity, there are ways you can lower your debts if you do some investigating;
  
  
• Help – While just about no one wants or can afford to work for free, there are some options available where you can get help and not spend a ton of money. Look to interns and/or hiring part-time help (under 30 hours of assistance means you are not responsible for healthcare benefits). Down the road if things are better for you financially, you always have the option of bringing folks on in a full-time capacity.

While you may be in a financial pinch and need to seek a business loan, research your credit score and credit history first to make your loan pitch all the better.

 Feedback   Submit Article