4 Essential Steps Before Applying For A Business Loan
When an idea hits…not a regular idea…but a really great idea for business, you get very excited.
You just want to make it come true.
You are anxious, excited, and passionate about this business idea. You think briefly about what you need to make the idea into reality.
You may require a business loan or funding to bring your idea to life.
When this is the case, you have to ensure you place yourself in the best position.
If you already have an existing business, you may need a small business loan to grow your business. You may need funds for unexpected or unforeseen events.
You may need a business loan for…
- business working capital
- bridge funding
- project funding
- business cash advance
- business expansion
- purchase real estate
- purchase equipment
- better terms on an existing loan
Whether you are a startup or existing business, when you apply for a business loan, don’t you want the process to be simple and the outcome to be successful?
Then don’t forget these steps.
We will cover 4 essential steps to take before you apply for a business loan or funding.
The 4 essential steps are:
- Understanding credit reporting
- Free credit reports
- Free credit check
- Credit repair
These 4 steps focus on credit scores since it will impact most business owners.
It is possible to get business loans and funding based on business revenue. Generally, you should be in business for 6+ months and have a monthly income of $5,000+ or an annual income of $60,000+ to apply for revenue based loans.
Your credit score plays a vital role for business loans and small business funding as well as many other things throughout life.
Your credit score is used to…
- get a mortgage at the best interest rate so you can buy a home
- finance a new car so you have transportation
- get utility services for your home
- get credit cards
So, your credit score is used for many areas that have a high impact on your life.
Therefore, it is best to ensure your credit score is good.
When the need arises to buy a home, buy a car, activate a utility, or get business funding…you want to make sure your credit is ready.
Free credit reports, free credit check, and credit repair can be great resources to check and improve your credit score.
How does credit reporting work?
You are probably busy trying to balance work, family, life, and pursuing your dreams, but it is a great idea to make time to learn about credit.
You must learn how credit works and what impacts your credit score.
The more you learn, the better prepared you are for making the best decisions for managing your credit score.
Here is a brief video from Credit Karma that explains how credit reporting works. It explains how you must understand when your credit payments will be reflected to the credit bureaus and how your scores can differ with each credit bureau.
Free credit check
It is important to know your credit score to make sure you are in a good position when you need to use credit.
Free credit checks make it simple to verify your credit score. There are also credit monitoring services, but they usually have a monthly fee. This allows you to monitor activities that can impact your credit. Typically, you will receive alerts when your credit score has changed positively and negatively.
You can get a free credit check at:
Free credit reports
When you check your credit, you can also get free credit reports.
You should take your time and go through your credit report. You are not just looking for your credit score.
You also want to make sure all information on your report is accurate. Scan through your credit report to identify any areas that may be hurting your credit profile. You also want to ensure that you are not a victim of identity theft.
Annual Credit Report says these are some warning signs of possible identity theft…
- Credit card charges that you don’t recognize
- Calls or letters about things you didn’t buy
- Bills that arrive on unusual days
- New credit cards or statements for accounts that you didn’t open
- Denials of credit for no apparent reason
- Information on your credit reports you don’t recognize, such as accounts or addresses
If you are concerned about identity theft, there are identity protection services available.
In the video below by TransUnion, they explain how to understand your credit report…
Credit repair and restoration
When it comes to starting and growing your business, business loans and funding can play an important role.
To ensure you can get business funding when you need it, you want to make sure your credit score is sufficient.
When you want to get small business funding, you should have a minimum credit score of 650. Of course, the higher the credit score the better to achieve the best rates and terms for a business loan or funding.
When your credit score falls below the minimum, you have a couple of options…
- find a credit partner with a credit score of 650 or higher
- or improve your credit score
You can repair your credit on your own by submitting disputes to credit reports to the credit bureaus.
Many people are busy or don’t want the hassle. You may prefer to let the experts handle it.
Especially, if you need to focus more on your business, using a credit repair company may be the best option for you.
Some companies not only help to fix your credit but also offer education. This can prevent you from falling back into any bad habits that cause you to hurt your credit scores.
Before you apply for business funding, make sure your credit score meets the minimum requirement of 650.
You can do this by using free credit checks, free credit reports, and credit repair.
When you are ready to get a business loan or funding, you can apply here.
This company offers various funding options including…
- Business Loans up to $1M
- Business Lines of Credit up to $250,000
- Revenue Based Loans
- Up to 100% Equipment Financing
- Real Estate Private Lending
- And more
You can just enter your information to get started.
Now, you have some great information and resources to make sure your credit score stays in good shape so you can get the business funding you require.
Don’t let a 3-digit credit score stand between you and your business success.