If you\’ve never tried to get startup money for a business before then you\’re probably looking for ways to increase your chances of receiving that money. With the global economy in its current condition, many lenders are being very cautious and very strict as to who they lend money to and for what purpose. There are several ways that you can increase your chances of receiving startup money however the most is by obtaining business credit.
The Reason For Your Businesses Credit to Receive Start up Business Money
Banks and other financial institutions are in the business of lending money, not giving it away. So if they feel that you are in a high risk status and will not hand you over the check you need for your start up funds.
You have to appear as a legitimate business, with all proper documentation filed and correct. Establishing business credit means that you will be able to obtain double, triple, and even quadruple the money that you could with a personal loan. The other main benefit to establishing business credit is that you do not have to secure your personal assets to obtain loans with banks and other financial institutions.
With a business credit file you will give the banks peace of mind that you are operating a real and legitimate business. The banks will verify all the information that you place in your application, so be careful that all is correct and have been filed with the necessary sources such as the Secretary of State website.
You can always use tier one and tier two lenders for loans in the beginning, they are more opt to loan new businesses with little to no credit history funds for start up, although they will be smaller amounts. It is a great place to start and you are building your business credit file with each loan.
Your main goal is to build enough business credit so your personal credit will not be on the line and your credit report will not be harmed. With the income-to-debt rations lowering your personal credit score you certainly do not want a $100,000 loan listed in your personal file.
The ability to obtain an unsecured business loan is essential to your businesses and your personal future. The banks will treat you with respect as you deserve, your personal assets will remain untouched, and your chances of obtaining larger amounts of money for your business increase with each transaction you make.
Do not start off on the wrong foot, begin your journey to growing your business the correct way, as a business not a personal venture.