The Role of Personal Credit Scores for Business Funding

One of the benefits to building a strong Business Credit Asset™ is lenders, creditors, and suppliers will determine the level of credit risk based on the company’s creditworthiness rather than that of the owners.

However, there are instances where a lender will require a personal credit check as part of their overall risk assessment. In these cases it would be in your best interest that you have a positive credit rating with the consumer credit agencies.

If your credit scores currently fall below 680 then you will need to focus on taking some positive steps to improving those numbers. When you have favorable credit scores you have a much greater selection of funding options to choose from. Even if you allow a lender to check your credit rating, once approved, they may only report your debt and payment history to your company’s credit files not your own. Now if you decide to apply for business credit with a lender requiring a personal credit check, you should know what your scores are beforehand.

FICO is the most widely used credit scoring system in the world. The majority of lenders will use this system to obtain your scores so they can determine your credit risk as an individual. Each score is based on the information that each consumer credit agency keeps on record about you. First, visit MyFico.com and determine what your Transunion and Equifax credit scores are. The cost is $19.95 per score and it provides you with a detailed explanation on the positive and negative factors affecting your scores.

Secondly, you will need to order your credit score from Experian at their main web site. Currently they are offering a $1 credit report and credit score which also includes a breakdown of factors that raise and lower your scores. Once you receive your scores and reports, look for any errors, inaccuracies, or outdated information. If you uncover any questionable items with any of your reports then initiate a dispute immediately with the agency containing the errors.

For Equifax – Go to Equifax.com and click on the “Dispute Errors on My Report” text link. You can initiate a dispute online but you will need to supply a confirmation number which can be found on your Equifax credit report. For Transunion - Go to Transunion.com and click on the “Credit Disputes, Alerts & Freezes” tab. You will need to create an account first but once you login you will be able to initiate a dispute, check your dispute status, and trigger a credit freeze if you need to. For Experian – Go to Experian.com and click on the “Disputes” text link located at the bottom of the page. You will need a report number which can be found on your Experian credit report.

On this site you can start a new dispute, check the status of an existing dispute, and view results of a completed dispute all online. It is vital to monitor your personal credit and ensure that all the information being reported is accurate and up to date. Just one mistake can impact your scores and cost you hundreds if not thousands of dollars in additional payments and interest that you should not be paying.

What are the different kind of business funding programs are there?

Most people think of business funding as loans, but there are many ways to get operating capital for your business. For any of them you will have to do some of the basic footwork to create good business fundability such as obtaining vendor credit, getting a few business credit cards, and opening a business bank account. However, each source of business funds look at those things differently. You can find out how to build your company's credit within the Business Fundability System. When you are ready and need a source of cash for your business you should stop and think about what you need the money for, how your business fundability looks and if you can repay the money.

The reason for the last part is there are two types of business funds that do not require repayment, and a third that doesn't require repayment in the strictest terms. Bank Loans The obvious source of cash for your business is a straight loan from a bank. Getting a loan in your business' name isn't tricky, but it can be difficult if you aren't established. You will need very good business credit built up, have a reasonable source of income from your business to repay the loan plus interest. Grants have the huge advantage of offering businesses various amounts of capital without requiring repayment.

You won't have to pay back the initial loan or any form of interest. However, getting a grant can be quite frustrating. First you have to find the grant that applies to your specific situation. Then you have to generate a compelling grant proposal and convince the grant committee you deserve the money. Once you get the grant you're not done. You have to use the money exactly as you promise to according to the grant stipulations or according to your application. Some grants have other stipulations such as creation of a certain product or service. Some are given to provide working situations for minorities or other priorities according to the grant description and you must adhere to them. Venture Capitalists Getting money from a venture capitalist is another way to get money you do not technically have to pay back.

There are no loan payments, there is no interest, but you will have to give them a portion of ownership in your company and their share of the profits you eventually make. Many times a venture capitalist will be a silent partner, but at other times they may step in and take charge if your business isn't showing the productivity that is expected, or making profits the way it should. Personal Financing The final way of getting money for your business is to scrape it together yourself from outside jobs, or from friends and family. Depending on the source of this capital you may not have to pay it back. Other times you may be able to pay back the money as you can without worrying about being on time with a payment, and this type of capital may even be interest free if you get the money from your own work or from family members.

Unsecured Business Loans - Up To $50,000 (Start Ups Too!)

Unsecured Business Loans Up To $50,000

Borrow funds for purchasing equipment, remodeling, or expanding your business premises. Not all businesses are alike when it comes to money management. An unsecured credit line could be the answer.

Easy Access When you are approved for a credit line, it allows you to make draws on your line whenever you want. You have the ability to use your credit whenever you need it.

Quick Turnaround

You can have an answer quickly. Being able to respond to new opportunities fast is what being an entrepreneur is all about.

Competitive Rates

With a start up credit line, you only pay interest on what you actually draw down on your line, allowing your borrowing costs to always be competitive.

No Collateral Required

With an unsecured line of credit your business is not required to pledge any collateral to secure the loan. You are evaluated based on the strength of your business and your personal situation as a principal and as a guarantor.

Click here to maximize your money with a unsecured business loan.

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