Build Your Own Business Credit
There’s something you need to know: to get your business loan approved easily, you need to start building your business credit! Your personal credit history is important, but as a business owner, it is also extremely important for the survival of your business to start building your business credit. Like everything you have been building in the last months or even years, it takes time and patience, but it will be rewarding once you get that business loan you’ve been struggling to get approved.
So, if you are still wondering why your business loan is getting rejected, there’s a big possibility it might be because of your lack of business credit history. Remember that financial institutions and money lenders don’t give out loans just like that to anyone: they always take a close look at your background to determine if you’re a high-risk or low-risk borrower. While your personal credit score is always a good reference, having a good business credit score will help you get lower interest rates and better terms and conditions when dealing with big suppliers. If you’re still unsure on where to start, you might find this information useful.
Let’s take the case of Gloria Rivera, the owner of a small bakery shop in California. Gloria wanted to explore French pastries in her shop, for which she needed more money to invest in special ingredients and a bit of marketing to let people know about her new products. Gloria applied to get a loan in two different financial institutions and they were both rejected. She was surprised as her personal credit score was good enough, but once she approached a financial advisor, she got to know that her business credit score was low and she needed to do something about it if she wanted to make those improvements in her shop.
And that’s how little by little, Gloria improved her Business credit score and eventually was able to get a loan to grow her product variety, and with it, her business turnover. If you feel inspired by Gloria’s story but you’re still unsure on where to start building your business credit, you should definitely have a look at these 3 tips on How To Build Business Credit. It looks like a long way to go, but if you start now with small but impactful actions, you will get there in what will feel like no time.