Getting funding can be a huge challenge for solopreneurs and other business owners. This can be the case whether you're starting up or have been in business for a while. Getting funding often seems to be particularly difficult when you need the money most. In this article we provide a brief summary of key factors that affect how lendable your business is. For full details and action steps, download the free report, 5 Easy Steps to Becoming Lendable.
Brief Summary
1) The past is important. Be aware of your credit history:
It is important to have activity on your credit accounts to gain lendability; but what kind of activity do you need? Those who do not have history can accelerate their credit growth through strategically opening accounts. But how you use your cards (or don't) affect funds availability. Negative items obviously will negatively impact your scores and lendability. You can significantly boost your credit scores, just by doing a little housekeeping. Actively monitoring your credit with a service like Identity Guard, can help you stay on top of items that need attention and your credit health overall.
2) Balance is key. Be mindful of your balance-to-limit ratio:
How much of your credit you use affects your score. If you have a personal credit card with a $10,000 limit, for example, there's a maximum balance you can carry before your credit scores begin to drop. But did you know, this rule typically does not apply to business credit?. The key is finding, business credit lenders that do not report the business accounts to your personal credit report. How you make payments can also affect your score and funds availability. Our report shares some of the reporting practices by credit lenders that can make your debt seem more inflated, lower your credit scores, and/or lower your limit.
3) Killing Codes. The credit bureaus will tell you what they think is wrong:
Most credit monitoring sites will provide an overview of what factors are impacting your credit scores. A tri-merge credit report will list "codes" that the credit bureaus use to show what is making the biggest impact in factoring your score. There are several ways to combat the codes and maximize your lendability.
4) Inquiries. Checking your credit can hurt:
You probably already know that having excessive inquiries within a 6 month time frame will hurt your scores and your lendability. But did you know you may be able to remove some of your recent inquiries to help keep your scores high? This is especially the case when inquiries related to applications for business credit show up on your personal credit report. Download the 5 Easy Steps to Becoming Lendable report to learn how to remove inquiries.
5) Regular credit check-ups and long-term maintenance.
Once you become lendable, stay lendable by maintaining a solid credit profile. Keep up with the basics, such as paying bills on time (or early!). Use credit monitoring service like IdentityGuard.com to keep in tune with fluctuations. Just by following basic maintenance steps, some banks will increase your limits automatically.
Learn more about how to become a savvy credit user and leverage zero interest credit for investing and to grow your business. The 7 Seeds/Fund and Grow program can help entrepreneurs get funding, but the business has to be lendable! Download the free report, 5 Easy Steps to Becoming Lendable now.