Business Credit Ratings

Access to credit is crucial for business owners at various stages of development and growth. If your business credit rating has been damaged, however, securing a business loan or credit line can be difficult.

While you may be required to agree to less favorable terms and conditions, there are a number of ways you can obtain a traditional loan with a lower credit standing.

Put down more collateral

Lenders rely on your business credit score to measure the likelihood that you will meet your payment obligations and limit their exposure to risk. A low credit score can make you appear as a risky investment. However, if you agree to put down a significant amount of collateral, you provide more security to lenders, which may improve your chances of securing a loan. If this is the course of action you take, be diligent about managing your account responsibly to avoid losing your assets.

Accept a higher interest rate

Many traditional lenders are willing to extend credit to companies who make up for their low credit scores with a solid business plan and consistent cash flow. However, you will likely be assigned a higher rate of interest. While paying a high rate will increase your overall payoff amount, it may help you secure the funding you need. In addition, if you improve your credit standing over time, you may be in a position to negotiate a lower interest rate later.

Get a co-signer

In cases where lenders refuse to consider your credit application, asking a family member to co-sign a business loan may help you get approved. Keep in mind; however, that their credit standing will be impacted by the way in you manage the financing. For this reason, make sure you don’t take on more than you can handle at the risk of damaging family members’ credit scores.

Finally, in today’s challenging economy, business owners should be diligent in protecting and, if necessary, repairing their business credit reports by implementing a sound business credit repair .

Obtaining business credit with a blemished history may seem impossible, but there are several financing opportunities if you are willing to explore credit solutions.

Sponsored Post from D&B Credibility Corp

Authored by Don Berkman

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