How to Use Business Credit Bureaus to Improve Your Business

Now that you are utilizing a variety of products offered by your financial institution such as overdraft protection, online banking, a business check card, and merchant services, let’s cover the importance of establishing a healthy bank rating and account history.

These two play a big role when you apply for bank financing from your financial institution. For example, when you apply for a line of credit they not only review credit ratings and financials but they will also review your company’s account history, deposit history, balance rating, NSF record, etc.

There are specific steps you can take that can improve your company’s chances for obtaining the amount of financing it needs. Remember, the less risk your business presents in the bank’s eyes, the more chances they are willing to extend credit to you.

In a nutshell, the bank wants to ensure that your company has the necessary funds to repay a loan. How they determine this breaks down to you and your company’s credit ratings, cash flow, financials, returns, and banking relationship.

Previously we covered the importance of utilizing your bank’s products and services but this is only one part of establishing a favorable banking relationship.

Here is how to establish a positive bank rating and account history:

1.Make consistent deposits – This can be easily accomplished if you use this account to receive your credit card settlements from your merchant service provider. Consistent deposits show a healthy cash flow coming into the business. With a consistent cash flow a bank can easily determine that your company has the ability to pay.

2.Keep a healthy account balance – This is just as important as making consistent deposits because after paying all your company expenses, what’s left over at the end of each month is your excess cash flow. If all the cash flow that comes in goes out every month, how can your company handle another expense like a loan payment? This would clearly show a bank that your company has no additional cash flow and can hurt your chances for getting a loan or line of credit. Ideally, you should aim to maintain at least $10k in your account at all times.

3.Maintain a positive bank account history – If you took advantage of adding overdraft protection to your account and focus on keeping a healthy account balance, maintaining a positive bank history should not be a problem for you. Don’t make the mistake of writing bad checks and causing overdrafts on your account because this is a clear red flag for banks.

4.Season your bank account – The longer you stay with your bank and maintain a positive bank rating, the greater the relationship you will establish with your financial institution. This shows your bank that you run a stable company with longevity.

Your business banking relationship is another key benefit when building a Business Credit Asset™. Even though your bank account history does not appear on your business credit reports, any loans, lines of credit, and business credit cards that you obtain from your bank can help further improve your company’s creditworthiness.

Your financial institution will help further expand your company’s ability to obtain financing while providing you with the necessary tools needed to manage your company’s finances on a national level.

Guaranteed Finance for People with Bad Credit!

Past, Present, Future

The truth is that many lenders are aware that people who currently have bad credit used to have good credit or even excellent credit and for unexpected situations their ability to obtain finance was heavily compromised. Past financial mistakes shouldn't determine once financial future as long as people learn from those mistakes and that's what more and more lenders are beginning to understand.

Secured or Unsecured Loans

There are many online lenders dealing with bad credit personal loans. This kind of loans can be secured or unsecured. Unsecured loans do not require collateral but often carry higher interest rates due to the high risk involved. Secured loans carry lower interest rates and require collateral. Thus, you should only request a secured loan if you are certain that you will be able to afford the monthly payments. Since the collateral guarantees the loan, you are risking the asset and the lender can claim his money by use of the legal action of repossession.

Uses and Benefits

The uses of bad credit personal loans are variable, ranging from going on vacations, buying a car, and most commonly debt consolidation. Specially when used for eliminating debt by paying off bills and credit card balances, Bad Credit Personal loans will contribute to raise your credit score and improve your credit history. The timely monthly payments will be recorded into your credit report, enhancing your credit situation till you can acquire a good credit tag.

Co-signer

A way to make sure a lender will approve your Bad Credit Personal Loan is applying with a cosigner, especially if he or she has a better credit score and history. This way, the lender will take into account the co-signer credit report when deciding whether to approve your loan or not. The risk involved for the lender will be significantly lower because the co-signer will also be responsible for paying the monthly installments if you fail to repay on time.

Interest Rates

Interest rates are usually higher when it comes to bad credit personal loans, however they are usually lower that credit card's interest rate, which makes them a better source of finance. Also, there are many options available out there, so don't settle for the first proposal and ponder what each lender has to offer you. Be aware that variable interest rate, though it is usually lower than fixed interest rate, can vary according to market conditions' changes and you may end up having to pay higher monthly installments if the market situation worsens significantly.

Online lenders

The wisest thing to do is to search online, there are many online lenders offering very reasonable interest rates and you'll be able to get quotes from them and compare rates and fees before making a decision.

Startup Business Loans - Exploring Other Avenues for Building Capital

Startup business loans are a great way to launch a successful business. Unfortunately they are sometimes the hardest to get from lending institutions. Startup business loans are one of the few areas that even the Small Business Administration do not offer to assist in and this becomes a major impediment to banks and credit unions making this type of loan available.

The Small Business Administration is an agency of the federal government with a specific mandate to assist small business in America. It provides much of the funding for business loans made by banks in the form of guarantees for these loans. If a borrowing business defaults on a business loan or goes bankrupt the Small Business Administration will step in to cover the bank's costs.

But when it comes to startup business loans, the agency tells banks and small businesses that they are on their own. That of course does nothing to reassure the banks who are nervous enough about lending fledging businesses any of their hoarded gold and it supports the banks' own inclination to not provide startup business loans. In order to get approval for startup business loans the banks will normally require a personal guarantee from the business owner or a pledge of a collateral asset to secure the loan.

Meeting those conditions will only get a business to first base with the banks in terms of startup business loans. After this initial review the banks will closely examine the business plan of the prospective business borrower and want to be convinced that the business has an excellent chance to succeed before provide funding in the form of startup business loans. In addition they will likely review the personal credit history and records of the business owner to ensure that their credit history does not show any potential danger signs.

The best way is get startup business loans is probably not through banks or credit unions at all. It is much easier to borrow money from friends or family if they have the financial capacity to assist. Another avenue for startup business loans is to bring in partners or investors who believe that the business makes sense and want to share in the revenues that will be created. A third place to look for startup business loans is in the local business community.

There are often successful business people who want to assist new businesses to get started and they may be a source for startup business loans or they may be able to provide references or referrals to people who can. There's no harm or loss of face in asking for help from these people. Even the most successful amongst them has probably been turned down for startup business loans in the past and many of them are willing to give a little back to help the newcomer on the block get started in the business world.