What Credit Score Do You Need To Get A Loan?
- FICO scores of less than 660 will have a hard time finding a bank that is willing to give them a loan (Ventury Capital 2015).
- Banks will give better loan rates and terms to business owners who have a FICO score of 720 (Ventury Capital 2015).
- SBA will not usually consider a loan for a business whose owner has less than a 700 FICO score (Ventury Capital 2015).
- Many alternative lending sources only lend to scores above 550 (Fit Small Business 2015). Many of these lenders take into account other factors, beyond your credit score.
Benefits of Good Business Credit
- –Business Credit is credit tied to the business ability to repay not the owner therefore, Business Continuity not effected by personal events (divorce , death, etc)
- demonstrate separation between owners and the business
- Corporation and LLC treated as its own stand alone entity
- Protects business assets from personal creditors and lawsuitsLegal Protection
- Vendor Credit is easier to establish with major firms
- Reduce Cost of Financing thus giving you better profits
- Good credit reduces the approval time to hours instead of days
- Large companies check your credit rating to ensure you can handle their increase sales opportunity
- Have a better selection and choices among lenders and programs for your needs
So How Do I Set Up Credit For My Business?
- Incorporate your business as LLC or Corporation
- Obtain a federal tax identification number (EIN)
- Open a business bank account
- Establish a business phone number and get listed in 411 directories
- Open a business credit file with reporting bureaus
- Obtain one or more business credit card(s) that reports to the bureaus
- Establish a line of credit with minimum of five (5) vendors that report
- Get a small loan in the business name longer than 12 months
- Pay your bills on time both personal and business
We help companies establish their business credit and then find ways to refinance their business using multiple sources of funding to improve their company’s credit scores..