Keys To Getting Successful Small Business CreditCorporate America seems to be flushed with so much cash that people think all they have to do to find small business credit is to pick up the phone for an appointment with a credit manager or to click the send button on an online application. Financial institutions may be flush with cash, but getting some for small business credit is not easy as one thinks. In applying for small business credit, the first thing to consider is one's credit history. Beginning entrepreneurs often fail to realize that it's them and not the business venture that is under initial scrutiny. A lending institution will never look at a business's potential first, but would rather look first if the business owner has potential of his own to makes optimal use of that credit. Having bad credit history will most likely create the impression that you are not good with credit- end of story, application for small business credit denied. In applying for small business credit, you have to take a thorough look into your personal credit history first. Improving your chances of a successful credit application would depend on the state of your credit history. You have to be aware that despite the robustness of the small business landscape, this economic surge is also matched with numerous bankruptcies and delinquent payments and arrears. Banks and other lending institutions have tightened the reigns on credit applications and have enforced rules and regulations to ensure that when they do approve credit for a business, that credit would be paid. The scrutiny falls first on the applicant. Be sure that when you are asked why you missed a payment, you would be able to explain why but most importantly, know what they are referring to in the first place! Credit histories are so much like parking tickets in the sense that people disregard them as inconveniences rather than as obligations that one must fulfill in the soonest possible time. But while failure to pay for a parking ticket will only result in a minimal fine, credit history gaps can cost you more. Before applying for small business credit, make sure that you have filled in all the possible gaps. It is not unusual or exaggerated to come across true stories of people who have failed to clean their credit histories only to find their small business credit applications denied because of a "little" detail over some canceled credit card 5 years ago. If you think that your credit history may have some mistakes and gray areas that you may no longer have access to, find a credit card bureau that specializes in missing credit history data to weed information out. Once your credit card history has been polished and cleaned, then it is time for the all important step of forwarding your application. Remember that small business credit applications are all about numbers and how they create a solid picture of your credit-worthiness. After the lending company has gone over your personal credit history and found it sufficient, you can breathe a little easier but it is not quite done yet! If you are applying for credit below $100,000, the company may use an automated credit scoring system. How you fare well with this system is based on another set of figures- your company's financial numbers. Like your credit history, you can polish your company's financial profile as well. Have a consultant go over your business plan and improve on areas where you think might not do well based on aspects of the automated credit scoring system. The key really to a successful small business credit application is health- a healthy financial profile for yourself as well as your company's. |