Business credit tracking has become very popular with most small businesses. There are many reasons for doing this and a lot of benefits to using it. Let's look at some of these benefits:
Most banks want to see proof that you can pay what you owe on time. They want to know that you won't default on loans. This is why they test your credit score so they can make sure you'll make payments when you're supposed to. When they see that your credit score is great, they'll offer you a loan without any collateral which means you're getting a great interest rate and the best terms from the banks when you use business credit tracking.
Some business credit bureaus also provide a copy of your credit report to lenders. Many times lenders will approve a loan even if you've had a bankruptcy in the past, if you have this information in your business credit tracking system. You can get the information about all of your lenders from one place so you don't have to go through multiple lender websites. This is a big advantage over how things used to be.
It's also a big advantage if you have cash flow problems. Lenders like you to have a steady cash flow so they'll approve you easily. But your credit score also affects your cash flow. You can test out all the new programs you can find to track your cash flow. You might be surprised to learn that you have a lot more than you thought and you can use business credit tracking to increase your cash flow.
You also don't have to lie on your financial records when you apply for a bank loan. Your financial information should be accurate and you shouldn't have to falsify anything just to get a bank loan. Lying will only negatively affect your credit profile. This will be a huge disadvantage, especially if you're trying to get a small business loan.
Many business owners don't think about this scenario because they think that banks only want to lend to large businesses or corporations. And, they think that this is enough. But, no matter how big or how small your business entity is, you can still get loans if your business credit profile is excellent. You may not even need a business credit profile to get a loan.
So, what kind of banks are willing to give small business owners personal credit score help? Well, some of them are and some of them aren't. Most banks are willing to at least consider giving you a second look because they realize that you're an asset to them as long as you continue to make your loan payments on time. They can also be assured that you have enough collateral to pay the debt if something happens like a lawsuit against you.
In fact, these days it's more common than ever for banks to want to make business loans to small businesses instead of individuals. Banks want to avoid lawsuits and repossessions of their property in the event of non-payment by their borrowers. It's also important for banks to be able to collect on loans in case customers stop making payments and then continue to do so. Businesses can only serve their clients well, if they have the collateral to back up their personal assets. This is one reason why many banks are willing to take a second look at your credit score before approving a loan amount for you.
Another reason why banks are willing . . . . . . to consider giving you a second look at your credit score before approving your application for a business loan is that they are aware that you might not be using all of your available credit limits. Some small businesses owners tend to get into trouble by charging things they don't actually need to spend money on like travel expenses. Banks want to make sure that there is sufficient collateral for you to borrow so that they won't have to seize your business. If you default on a bank loan, you could face serious legal actions from the very people who are owed the money.
There are other ways for banks to evaluate your credit score before approving loans for your business. Smaller banks may offer you unsecured loans to start up your business that come with much lower interest rates than traditional unsecured business loans. Smaller banks will also allow you to apply for a business line of credit from them if you have enough equity in your home, which most small businesses don't. However, these alternatives may be limited because these lenders usually don't have access to the corporate credit score of large corporations.
A final way that you can get loans for your business even with bad personal credit is to work with private, individual lenders. There are private, individual lenders online that specialize in giving small businesses cash advances when they need them. You can find these private individual lenders through a simple search online or by looking in your telephone book. These lenders typically only require a working business account so that you can get cash advance loan payments when they are due. It is best to work with these lenders rather than large commercial finance institutions because they are more likely to be sympathetic to your plight.