HOW GOOD DOES YOUR CREDIT HAVE TO BE FOR A BUSINESS LOAN

Business loan eligibility is something of enormous concern, especially for new start-ups. New business owners are usually confused as to what they would need to secure one. But the most widely asked question is “what credit score do I need?” The answer is not far-fetched as the requirements for loan depends on the lender or bank.

Traditional Lenders and banks would always insist on analyzing your personal and business credit score before loan approval. Building business credit is usually difficult in the beginning, but it is something you should never stop aiming for.

  • What is a business Credit score?

Business credit score is number that has been accumulated by a business through expenditures and profits. This score pertaining to the business determines whether a business is capable of receiving a loan. This score gives a sort of reassurance to lenders and banks that the loan can be repayable by the borrower.

Usually, one has to pay to have their credit score calculated. You can go to any reporting agency to look up your credit score after paying for the service. Some of the agencies can even help you keep tabs on it. Click here to get more about business Credit score.

HOW GOOD DOES YOUR CREDIT HAVE TO BE FOR A BUSINESS LOAN

High business credit score increases the likelihood of your small business loan application being approved. Establishing your credit score is expedient to your business growth. It gives small businesses the avenue to secure competitive loans, protects their personal credit and get better insurance rates.

  • Business credit score versus Personal credit score

Although business credit scores and personal credit score may differ, they are both still important to the smooth sailing of your business. While business credit score runs from 0 through 100, personal credit score is scored on a scale of 300-850. With 75 and above being the most ideal for business credit score, and 750 and above being the ideal score for personal business score. Learn more about credit report and score basics.

Business credit score cannot be tracked with social security number unlike personal credit score. Business credit scores are also publicly available, while personal credit scores are not. However, it is still required for your score to be high on both side to gain small business loan eligibility.

  • How do I build small business credit?

Building good business and personal credit score is not always easy for small business owners. Here are some important steps that can be taken to build your credit score.

  • Official registration of your business with the LLC is the first step. People are of the idea that if they can pay their debts on time, they automatically have a good credit score. That ideology is misleading. As you need to be registered first, before your history of on-time payment can be recorded.
  • Make early payments
  • Acquisition of a business credit card and a business account.
  • Use vendor services that reports your payments to the business credit bureaus.
  • Regularly check up on your scores.

All the listed tips will assist you in getting your business score up to par. Small business owners need not be afraid of applying for loans after reading this article.

HOW TO START A BUSINESS WHEN YOU HAVE LITERALLY NO MONEY

Small business startups require funds to become established. In fact, there I don’t think there is any business you can venture into without capital. Having a business goal is one thing, finding the right amount of money to execute it is another thing. As opposed to popular belief, businesses do not necessarily require a large amount of money to start.

But what happens when one has literally no money to start? Does one let that idea go to waste? The truth is having “no capital” is one of the greatest obstacle any business idea can face. So much so that you are discouraged to even start and that idea just goes to waste. Check out more information on https://www.forbes.com/sites/ryanwestwood/2014/10/08/how-to-start-a-business-with-no-money/

Absence of capital should no longer be a deterrence to your business dreams after reading this article. Here, we provide guidelines as to how your businesses can be established even when you have no money.

  • Personal Determination

Determination is an intangible asset but a very necessary one. Obviously, without personal determination that business idea will exist, but only in your head. Entrepreneurs need to develop a sense of determination before venturing into any sort of business.

As the saying goes; when there’s a will, there’s a way, determination pushes you to find a way around obstacles. Determination embodies you with dauntless business courage. With determination, your mind is more open to ideas on how to garner funds. Determination refuses you from folding your hands and watching your business idea. So, make a firm resolve today to bring that business dream into actualization. Click here for more help to startup a business.

HOW TO START A BUSINESS WHEN YOU HAVE LITERALLY NO MONEY

  • Start With What You Have

There’s a common misconception about the “what you have” phrase. The misconception is that “what you have” has to be monetary and that’s a lie. What you have can be anything. It can be mental assets. What you have can be skills, past experience, knowledge and tangible resources if any.

So, the questions you should be asking yourself now is, what can I do? What do I know about the field I’m about to venture into? How much do I have in savings? The answers given to these questions should be carefully thought through. Write down your answers and do a personal assessment of them. This will help you in creating and drafting a viable and valuable business plan.

  • Networking

The people you know are like personal assets. Take into stock who you know and seek help. Pitch your ideas to them in the most interesting ways possible. Friends and family are usually the first line of help for most new businesses. You can even get partners to share in your idea. Partners that are willing to fund the business. Learn more about main sources of business finance.

One can also create a network by using social media. By creating a social media presence, you create demand. If your business does not require so much to start, then social media is your answer. Use it to your advantage and your business might just kick off

  • Don’t worry too much about profits

Instant gratification is disease in entrepreneurship. People want to establish businesses with the intent of making gains immediately. I put it to you that, that is a very bad mindset. This mindset might prevent you from trying any harder by the time the profits aren’t coming through. Drop that mindset today!

Lack of funds should not stop you from starting that business venture. Discard the ideology that funds is all you need. Use the tips above and actualize your goals.

THE MAIN SOURCES OF BUSINESS FINANCE

Business finance exploration is one of the toughest aspect of entrepreneurship, especially for new business owners. This is as a result of the fact that there are so many sources for financing and they are confused as to which is most suitable for their business.

Before sourcing for finance as an entrepreneur, there are certain things you should put into careful considerations. Things like; how much you will need, your business plan, timeframe for repayment, cash inflow and most importantly the requirements of the source. Get more about business loan eligibility on https://www.therosecircle.org/how-good-does-your-credit-have-to-be-for-a-business-loan/

In putting the aforementioned into consideration, you are able weigh your options and make the right decision. So in this article, we are going to explore and evaluate five main sources of business finance.

  • Personal finances

This is a source from you as a business owner. It maybe your personal savings or business assets. You bear all the risk entirely. Self-funding has been found to be the easiest and quickest source of funds. Once, you have a business plan, you can move on to actualizing it. You do not need to wait for anybody to offer help.

  • Financial institutions

These are institutions that are willing to give out loans to businesses. They include; banks, credit unions, and building societies. Financial institutions help business by offering various loan options and lines of credit. These institutions have their requirements—requirements you must meet before you can be granted the loan.

THE MAIN SOURCES OF BUSINESS FINANCE

  • Private investors

Private investors are also known as business angels. They are wealthy entrepreneurs or individuals that offer funds to businesses especially new business. They usually help new businesses that their loan proposal has been disapproved by conventional professional lenders.

  • Government

The United States government usually offer help to businesses. For example, amidst the pandemic, they offered business funding options like the PPP and EIDL. Most government assistance are free and interest rates are mostly affordable. Eligibility for government grants depends on the requirements they require.

  • Venture capitalists

These are private equity investors that fund businesses with an aim of having a stake in the business’s profit. Venture capitalist fund mainly startup ventures and offer support to small businesses for expansion. Learn more about private equity investors.

  • Peer to peer lenders

This is can be done online and otherwise. It connects lenders with borrowers. it usually has a shorter repayment plan and higher interest rates depending on the lender.

  • Friends and family

Typically, our friends and family are the first people we pitch our ideas to. They may offer you money as loan or for free. Most times for free. This is also one of the easiest source for business financing. In cases of repayment, make sure you have a written agreement to avoid any sort of misunderstanding.

As you can clearly see there are a lot of sources to turn to for business finance. Small business owners need not be afraid anymore of financing options. You can even combine sources to meet your financial needs. With all the options listed above, you should be able to reach your business goals.