Personal Credit is One Gateway to a Lenders Pocket.

Personal credit is at the heart of good financial health and lenders know it.

If you have stellar credit, you can apply for most business loans without a worry. Even still though there is a danger in the personally guarantee to repay a business loan.

Here’s some real guidance as to how to proceed whether you have good credit or not.

Your Questions

What can I expect from lenders if / when I apply for an unsecured business loan?

But what if my credit isn’t the best right now? Can I still get business financing?

Real Answers

What can I expect from lenders if / when I apply for an unsecured business loan?

A Focus on Credit

You can expect lenders to focus on your personal…

  • Credit score

  • Credit report and

  • Debt to credit ratio

Think about it this way. They have no collateral on these loans.

Their only recourse is the ability to report any late payments to the credit bureaus and thereby destroy your credit report. It's the only real way they have to keep borrowers on their toes.

With that in mind, it makes sense that your credit is their primary concern.

To lend out unsecured funds a lender must become like a skilled acrobat walking across a tightrope without a safety net.

The acrobat’s only safety is in the rope itself.

Certainly he would be concerned about the strength of the rope. Is it strong enough to retain his weight? How can he be certain there is no weakness in it?

The lender’s livelihood is dependent on the rope called your credit. No wonder they put so much focus and emphasis on it!

But what if my credit isn’t the best right now? Can I still get business financing?

Bad credit sends the lender the message: Beware! This rope is just not strong enough.

If this is the case for you it would be wise to follow these steps and to do so in this order…

Using alternatives can get you the money you need right now. You can get the money you need while preparing yourself to borrow more as needed in the future.

In the meantime build your business credit. It’s easier and quicker than building your personal credit. And it basically gives you a fresh start opportunity to establish credit and avoid a personal guarantee.

Building business credit could take up to 6 months but you can qualify for financing in as little as 3 months. Do this even if you have stellar credit.

Building your personal credit takes longer. But time is passing by anyway. You may as well take the steps to build your personal credit in the meantime as the long term benefits are so numerous.

Follow these steps in this order and the funding possibilities and benefits to you will be practically limitless.

P.S. - Lenders will also look intently at your credit report for what is called your Debt to Credit Ratio. To learn more about it, click here.

P.P.S – Working to improve your credit score only makes sense. Click here to learn more about your personal credit score and how to improve it.

Return from Personal credit to Business Loans

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