As a small business owner you have to deal with business expenses all the time, and some are more costly than others. From paying your all of your employees to managing your day to day expenses, if you are not being proactive about it the expenses can add up quickly, affect your revenue and could lead to failure of your company.
It is no surprise that having good business credit is essential when growing your business. When you have a good business credit score you can secure better terms with lenders and suppliers. If you are looking to apply for a business loan, you will get low rates, good terms, and a large amount of capital. There are so many benefits to having a good credit score and today we are going to discuss the steps to take to build your credit now.
If you are a small business owner, you need to document every transaction. Without any records, it is difficult to do your business taxes and keep your finances in order. If you do your own bookkeeping, the terms “invoice” and “receipt” are probably familiar to you. They both have similar functions but are very different from each other. It is important to know how these two differ and understand when it is better to use an invoice or receipt for your customers.
There is a lot that goes into applying for a business loan and it can be an overwhelming process. You need to determine how much money you need, where your business is headed in a few years, and what you will use the funds for. The good news is that there are steps you can take to learn how to apply for a business loan.
Many people use a line of credit or a credit card as a form of financing for their business. You can borrow money from a lender or a credit card issuer and repay the balance with some interest. They both are flexible on how you can use your funds and how you repay them. They are very similar, but they also have differences that exist between them. Today we will discuss how lines of credit and credit cards work how they are similar and different, so you know which works best for your business.
Many traditional lenders evaluate the potential of small business owners using a framework called the five C’s of credit. It is important to have a good understanding of what lenders are looking for in order to have to best chances of getting approved for business financing.
Financial forecasting is essential for any business type and business size. You need it to receive funding from banks or investors and is necessary for you to understand how to ensure your business will be successful. Predicting the future of any business is difficult but a financial forecast will be helpful for understanding what the success of your business can look like financially.
A credit pull is also called a credit inquiry which is a request from a business entity, lender, landlord or a credit company and they check what your credit is. This can negatively affect your credit score depending which type it is. There are two types of credit pulls, a hard credit pull and a soft credit pull.
There are lending criteria’s for each lender and each state but when applying for a business loan, everyone must follow the Uniform Commercial Code (UCC) filing. UCC filings or liens are a legal declaration from the lender to notify the interest in the collateral offered by the borrower. The UCC filings allow lenders to claim collateral that a debtor uses for securing financing. You might have seen a UCC-1 filing on your business credit report.
Most businesses count on loans to help with their small business’s needs. Not only can the process seem overwhelming or nerve wracking, there might be fear that you may not get approved for what you are looking for. Lenders deny hundreds of people getting approved every day and it can be really disappointing to get denied as a business owner. It is nothing to worry about or be ashamed of. What does matter is that you should start to look into the reasons your application was denied so you can then avoid them next time you apply. In this article, we will discuss some of the reasons why your loan application was denied and the following steps to take afterwards.