Get a Credit Line for Your Business During a Business Contraction

So, you’re finally doing it. You took the plunge and you started your own small business. But there is so much you need! Whether it is renovations for your location or payroll or the ramp-up costs for getting manufacturing started, all of those things need money. You need to get a credit line for your business, even though we’re in the midst of a business contraction.

Because you are not made of money.

But your business is new, so its credit score is not so hot. As a result, you are probably wondering how to finance a business with bad credit.

But let’s step back a little, because you should also be thinking about where to establish business credit.

Fight the Business Contraction and Get a Credit Line For Your Business

Recession Period Financing

The number of United States banks as well as thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the market along with deregulation in the 1990s, lowering obstacles to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets focused in ever‐larger banks is problematic for local business owners. Big banks are much less likely to make small loans. Economic downturns indicate banks end up being a lot more mindful with financing. Luckily, business credit does not depend on banks. And it doesn’t matter what happens with COVID-19.

Get a Credit Line for Your Business: What a Credit Line Is

A credit line, or line of credit (LOC), is an arrangement between a borrower and a financial institution or private investor which sets a maximum loan balance that a borrower can access.

A borrower can access funds from their line of credit anytime, so long as they don’t go over the maximum set in the agreement, and as long as they meet any other requirements of the financial institution or investor for example, making on time payments. This is the same whether the economy is going through a business contraction or not.

The Advantages

Credit lines offer many unique benefits to borrowers including convenience. Borrowers can use their line of credit and only pay interest on what they use, unlike loans where they pay interest on the total amount borrowed. Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.

Details

Credit lines are revolving accounts similar to credit cards, and compare to other kinds of financing such as installment loans. In many cases, lines of credit are not secured, much the same as credit cards are. There are some credit lines which are secured, and thus easier to qualify for.

Credit lines are the most routinely requested loan type in the business world even though they are preferred, true credit lines are uncommon, and hard to find. Many are also very hard to qualify for, requiring good credit, good time in business, and good financials. But there are other credit cards and lines that few people know about that are available for start-ups, poor credit, as well as if you have absolutely no financials.

Try the SBA During a Business Contraction

A lot of credit line types that most business owners imagine come from conventional banks and traditional banks use SBA loans as their prime loan product for small business owners. This is because SBA guarantees as much as 90% of the loan in the event of a default. These credit lines are the most difficult to qualify for because you must qualify with SBA and the bank.

Get a Credit Line for Your Business with SBA Loans and CAPLines, Even During a Business Contraction

There are two fundamental sorts of SBA loans you can normally get. One form is CAPLines. There are actually 4 types of CAPLines that can work for your small business.

You can also get a lower loan amount more rapidly using the SBA Express program. A lot of these programs offer BOTH loans and revolving lines of credit.

From the SBA … “CAPLines is the umbrella program under which SBA helps business owners meet short-term and cyclical working capital needs”. Loan amounts are offered up to and including $5 million. Loan qualification prerequisites are the same as with other SBA programs.

Seasonal Line

This one advances against expected inventory and accounts receivables. It was developed in order to help seasonal businesses. Loan or revolving are available.

Contract Line

This one finances the direct labor and material costs of executing assignable contracts. Loan or revolving types are offered.

Builders Line

This one was made for general contractors or builders constructing or renovating commercial or residential buildings. This line is for finance direct labor-and material costs, where the building project serves as the collateral. Loan or revolving kinds are available.

Working Capital

Borrowers must use the loan proceeds for short term working capital/operating needs. If the proceeds are used to acquire fixed assets, lender must refinance the portion of the line used to acquire the fixed asset into an appropriate term facility no later than 90 days after lender discovers the line was used to finance a fixed asset.

SBA Express

You can get approval for as much as $350,000. Interest rates differ, with SBA enabling banks to charge as high as 6.5% over their base rate. Loans above $25,000 will need collateral.

Approval Details

To get approval you’ll need good personal and business credit. Plus the SBA states you should not have any blemishes on your report. An acceptable bank score requires you have at least $10,000 in your account over the very last 90 days.

You’ll likewise need a resume showing you have industry experience and a well put together business plan. You will need three years of business and personal tax returns, and your business returns should show a profit. And, you’ll need a recent balance sheet and income statement, therefore showing you have the cash to repay the loan.

Collateral

To get approval you’ll need account receivables, but only if you have them. As for the collateral to counterbalance the risk, usually all business assets will function as collateral, and some personal assets including your home. It’s not unusual to need collateral equivalent to 50% or more of the loan amount. You also need articles of incorporation, business licenses, and contracts with all third parties, and your lease.

Get a Credit Line for Your Business from Private Investors and Alternative Lenders During a Business Contraction

Private investors and alternative lenders also grant credit lines. These are a lot easier to qualify for than conventional SBA loans. They also call for much less documentation for approval. These alternative SBA credit lines ordinarily demand good personal credit for approval.

Unlike with SBA, many of them don’t demand good bank or business credit approval. Almost all of these types of programs call for two years’ of tax returns. Tax returns have to show a profit. Rates can vary from 7% or greater and loan amounts range from $25,000 into the millions. Loan amounts are generally based upon the revenues and/or profits on tax returns. At times lenders may ask for other financials including a profit and loss statement, balance sheets, and income statements.

Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.

Merchant Cash Advances in a Business Contraction

Merchant cash advances have quickly become the most popular way to get financing, in large part because of the effortless qualification process. Businesses with $10,000 in profits can get approval, with the business owner having scores as low as 500.

Some sources have now even begun to offer credit lines that accompany their loans. You must have at least $10,000 in revenue for approval. You ought to be in business for at minimum one year, however three years is better. Lenders commonly want to see a credit score of 650 or higher for approval.

Loan amounts are ordinarily around $20,000. Lenders frequently do pull your business credit, so you must have some credit already and sometimes lenders will want to see tax returns.

Rates vary, due to the risk for this program, and there aren’t a lot of funding sources who offer it.

Securities as Collateral for Financing

You can get financing regardless of personal credit if you have some type of stocks or bonds. You can also get approval if you have someone wishing to use their stocks or bonds as collateral for financing.

Personal credit quality doesn’t matter as there are no consumer credit criteria for approval. You can get approval for as much as 90% of the value of your stocks or bonds. Rates are commonly below 2%, making this one of the lowest rate credit lines you’ll ever see. You can still earn interest as you typically do on your stocks and bonds.

Credit Cards and Lines are Very Similar

Credit cards often offer 0% intro rates for up to two years. This is also extremely valuable for startups in particular. And credit lines let you take out more cash at a much cheaper rate than do cards. These are the main two differences that will affect you between credit cards and credit line.

Investopedia even says that “lines of credit are potentially useful hybrids of credit cards.”

Both cards and lines are revolving credit. Credit lines are harder to qualify for as card approvals are generally very quick, many times automated, while line require an in-depth underwriting review. Lines usually offer lower rates, per Bankrate card rates average 13% while lines average 4%.

Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.

Unsecured Business Credit Cards During a Business Contraction

A lot of these cards report to the consumer credit reporting agencies. They all call for a personal guarantee from you. You can get approval typically for one card max as they discontinue approving you when you have two or more inquiries on your report.

Most credit card companies furnish business credit cards including Capital One, Chase, and American Express. These have rates similar to consumer rates and limits are also similar.

Some of them report to the consumer reporting agencies, some report to the business bureaus. Approval requirements resemble consumer credit card accounts.

Inquiries

Typically, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they will not approve you for more credit since they have no idea how much other new credit you have recently obtained.

So they’ll only approve you if you have no more than two inquiries on your report within the most recent six months. Any more will get you declined.

Grab Our Hybrid Credit Line During a Business Contraction

Check out our credit line hybrid. It’s available for all business owners. Get the benefit of 0% rates cards offer, and the cash out capability of a credit line. Get approvals to $150,000. Pay 0% rates for 6 – 18 months, with normal card rates afterwards. No documentation, no tax returns or bank statements are necessary. This program is ideal for startups, high-risk industries, and those who desire low payments. It also works if you don’t want to supply financials.

Our credit line hybrid is a superb choice during this time of economic uncertainty.

With this form of business financing, you work with a lender who concentrates on securing business credit cards. This is a very unusual, very few know about program which few lending sources offer. They can in most cases get you three to five times the approvals that you can get on your own.

This is because they are familiar with the sources to apply for, the order to apply, and can time their applications so the card issuers won’t decline you for the other card inquiries. Individual approvals frequently range from $2,000 – 50,000.

The end result of their services is that you frequently get up to five cards that simulate the credit limits of your highest limit accounts now. Multiple cards create competition, and this means they will raise your limits, generally within 6 months or less of first approval.

Approvals

Approvals can go up to $150,000 per entity such as a corporation. They actually get you three to five business credit cards that report solely to the business credit reporting agencies. This is huge, something most lenders don’t offer or advertise. Not only will you get cash, but you build your business credit as well so in three to four months, you can then use your new company credit to get even more money.

Details

You get credit with no security, assets, or collateral. Lender has no collateral to collect in case of default. Because there is no collateral, and they don’t look or care about your cash flow, the only thing that matters is your personal credit.

With a 650 you will get just personal cards. But with a 680 credit score, you will get both company and personal cards.

Rates

The lender can also get you low introductory rates, usually 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the best cards for points. So this means you get the best rewards.

Like with anything, there are substantial benefits in working with a source who specializes in this area. The results will be far better than if you try to go at it on your own.

Check out how our reliable process will help your business get the best business credit cards and lines, even during a recession.

Qualifications

You need to have excellent personal credit now, ideally 685 or better scores, the same as with all business credit cards. You shouldn’t have any negative credit on your report to get approval. And you must also have open revolving credit on your consumer reports right now.

Balance/Limit Ratios

They consider your balance/limit ratios on existing revolving accounts. The lower the ratio, the higher the amount of approval. A 30% ratio is a requirement. This looks at overall percentage, and individual percentage on each account.

Credit inquiries are a big factor tying into approval. More than six inquires in six months will be too much. Lenders do not want to see the person is applying for new credit, especially no other revolving accounts.

Guarantors Welcome

Use a guarantor or a credit partner to boost the numbers. Generally these people want a piece of the business in trade for their help. Creditors want to know you’ll pay them back. Most sources will charge 9 to 12% success-based fees. Only pay the fee off what you secure.

Fees

All lenders in this space charge a 9-15% success based fee and you only pay the cost off of what you secure. Bear in mind, you get a number of additional benefits and about three to five times more cash using this program than you can get on your own, which is why there’s a fee, the same as all other lending programs.

You can get approval using a guarantor and you can even use a number of guarantors to get even more money. There are also other cards you can get making use of this very same program but these cards only report to the consumer reporting agencies, not the business reporting agencies. They are consumer credit cards versus business credit cards.

Benefits

They furnish similar benefits including 0% intro annual percentage rates and five times the amount of approval of a single card but they’re a lot easier to qualify for.

You can get approval with a 650 score and seven inquiries (or fewer) in the most recent six months and you can have a bankruptcy on your credit and other derogatory items. These are a lot easier to get approval for than company credit cards.

With all preceding cards above, you must have good consumer credit in order to get approval but what if your personal credit is not good, and you don’t have a guarantor?

This is when building company credit makes a ton of sense even when you have good personal credit, setting up your company credit helps you get even more money, and in the absence of a personal guarantee.

Establishing Company Credit During a Business Contraction

Business credit is credit in a business name, in association with the business’s EIN number, and not the owner’s Social Security Number. When carried out properly, you can obtain company credit without any personal credit check and no personal guarantee. This is a thing all other cards above can’t provide.

You can get three types of business credit cards. First is vendor credit, which offers net 30 terms to launch a business credit profile. Then is retail credit, where you will get credit cards with high limits at most shops.

Next is fleet credit. It’s credit to fuel, service, and maintain business vehicles. And then there’s cash credit, which includes Visa, MasterCard, and American Express cards that you can use anywhere. You can obtain these without any credit check or guarantee. Limits are regularly $5,000 – $10,000 to begin, and can exceed $50,000.

Credit Lines in a Business Contraction: Takeaways

You can get a credit line for your business, if you know where to look. Learn more here and get started toward building company credit, even during a business contraction. The COVID-19 situation will not last forever.

The post Get a Credit Line for Your Business During a Business Contraction appeared first on Credit Suite.

How to Get a Commercial Line of Credit Right Now

Covid-19 has turned the world topsy turvy. There is no way around it. Most businesses need a little extra financial cushion at the very least. Most need much more than that. What happens in this post COVID-19 economy is literally unfolding as we watch. A commercial line of credit could be just the thing to keep your business going during a recession.

Get a Commercial Line of Credit Fast

The thing is, most business owners need money right now. That means you need the fastest, most cost-effective commercial line of credit that you can get. Why a line of credit rather than a loan? There are a few reasons, but one main reason.

Commercial Line of Credit vs. Loan

The most basic definition of a commercial line of credit is that it is a revolving credit, similar to a credit card. You have a limit and continuous access to that limit while making payments only on the portion you use each month.

For example, if you have a $10,000 line of credit, you can use however much of those funds you need each month for whatever you want, unless your lender issues some sort of restriction. If you use $2,000, then when you get your statement you will have to pay $2,000 plus the interest, rather than a payment plus interest on the entire amount of the loan.

If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.

What is the advantage of a line of credit over a term loan? Flexibility, hands down. With a line of credit, you do not have to repay or pay interest on any amount that you do not use. You have access to the funds as needed, but you do not have to repay the entire amount unless you use the entire amount.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

Commercial Line of Credit vs. Credit Cards

Now, you’re probably thinking that credit cards are super easy to get, and they work the same way. It’s revolving credit. You only use what you need. You only pay back what you need.

Why is one better than the other? In some cases, a credit card may be the better option. This is a choice to make based on several different factors.

The main difference between the two that most borrowers need to know is that a line of credit typically has a lower consistent interest rate. However, there are no perks like 0% interest or cash back that you sometimes see with credit cards.

Another benefit with a credit card is that it is typically unsecured credit, meaning you do not have to have collateral. Many credit lines do require security, or collateral.

Middle Ground: Credit Line Hybrid

There is middle ground between unsecured and secured credit, and between a commercial credit line and credit cards. It’s called a credit line hybrid. A credit line hybrid is revolving, unsecured financing that allows you to fund your business without putting up collateral, and you only pay back what you use. It’s quickly accessible, lower interest, and high limit. It’s the best of both worlds.

Who Qualifies for this Type of Commercial Line of Credit?

Who qualifies for a credit line hybrid? Well, if you have a personal credit score of at least 685, you’re off to a good start. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.

If you do not meet all of the requirements, it’s okay. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.

What are the Benefits of This Type of Commercial Line of Credit?

There are many benefits to using a credit line hybrid. First, as already mentioned, it is unsecured. That means you do not have to have any collateral to put up. Next, the funding is “no-doc.” You do not have to provide any bank statements or financials.

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Furthermore, frequently you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.

The process is pretty fast, especially with a qualified expert to walk you through it. One other benefit is this. With the approval for multiple credit cards, competition is created. That means it’s likely if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

Private Lenders: Another Way to Get a Commercial Line of Credit Fast

Private lenders generally operate online. They typically offer lines of credit to those with credit scores that are lower than what is generally required by traditional banks. In addition, often you can get the funds within a few days of application, rather than a few weeks. Here are a few examples.

Kabbage

Kabbage offers a credit line of up to $150,000 with no credit score required. The catch is that the interest rate is between 32 and 108%. The business must have been in existence for at least one year and have revenue of at least $50,000.

Due to the extremely high interest rate, this is really only an option for those businesses that cannot get financing due to a low or nonexistent credit score and need something immediately.

StreetShares

The credit line that StreetShares offers goes up to $100,000 for those who have a business credit score of at least 600. You also have to have been in business for at least one year, and have at least $25,000 in revenue. It requires weekly repayment.

This is a good option for smaller businesses that are okay in the credit department but have trouble meeting higher revenue criteria. Also, the interest rate minimum is lower than some. The low end at 9%.

OnDeck

If you have a credit score of at least 600 you can get a credit line of up to $100,000 with OnDeck . The interest rate is a little higher than some that require a higher credit score minimum. It ranges from 13.99 to 39.99 percent.

Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement with a lender that offers a lower interest rate.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

Lending Club

The credit line at Lending Club goes up to $300,000. It requires a credit score of 600, at least one year in business, and $50,000 or more in revenue. The repayment term is 25 months. In addition, they require collateral for limits over $100,000.

This is a good option for those who meet the requirement as there is a higher limit available with collateral, and the interest rate can go as low as 6.25%. Also, the repayment terms are more manageable.

Credit Card Options

Of course, while not the perfect solution, credit cards are an option. You have to be careful, and you want to research to ensure you get the best rates and terms possible. Here are some to start with.

Brex Card for Startups

The Brex Card has no yearly fee. Also, you will not need a personal guarantee. However, this card does not work for every industry.

To determine creditworthiness, Brex checks a company’s cash balance, spending patterns, and investors. Rewards include 7x points on rideshare and 4x on Brex Travel. Also, you can get triple points on restaurants and get double points on recurring software payments. Get 1x points on everything else.

Capital One® Spark® Classic for Business

The Capital One® Spark® Classic for Business is another good one to consider. It has no annual fee, but there is also no introductory APR offer. The regular APR is a variable 24.49%. However, you can get unlimited 1% cash back on every purchase for your company and there is no minimum to redeem.

While this card is within reach if you have fair credit scores, beware of the APR. If you can pay promptly, and completely, it’s a good deal.

Ink Business Unlimited℠ Credit Card

The Ink Business Unlimited℠ Credit Card has no annual fee and a 0% introductory APR. After that expires, the APR is a variable 14.74 to 20.74%.

Earn unlimited 1.5% cash back rewards on every purchase made for your company and get $500 bonus cash back after spending $3,000 in the initial 3 months from account opening. Rewards rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need superb credit to get approval for this card.

Blue Business® Plus Credit Card from American Express

The Blue Business® Plus Credit Card from American Express has no no annual fee and either, and it also has a 0% introductory APR for the first year. After that, the APR is a variable 14.74 to 20.74%.

Get double Membership Rewards® points on everyday business purchases like office supplies or client dinners. This applies to the first $50,000 spent each year. You get 1 point per dollar after that. Your credit has to be really good to qualify.

American Express® Blue Business Cash Card

Another one to check out is the American Express® Blue Business Cash Card. It is identical to the Blue Business® Plus Credit Card from American Express. However its rewards are in cash instead of points. You get 2% cash back on all eligible purchases up to $50,000 per calendar year. After that, it’s 1%.

There is no yearly fee, and there is a 0% introductory APR for the first one year. Afterwards, the APR is a variable 14.74 to 20.74%. You will need awesome credit to qualify for this card.

Credit Line Hybrid Financing: Get up to $150,000 in financing so your business can thrive.

Capital One ® Spark® Cash for Business

The Capital One® Spark® Cash for Business card is another great option. It has an introductory $0 annual fee for the first year. After that, it costs $95 per year. There is no introductory APR deal. The regular APR is a variable 18.49%.

You can get a $500 one-time cash bonus after spending $4,000 in the first 3 months from account opening. Also, you get unlimited 2% cash back. YOu can rRedeem any time without any minimums. You will need fabulous credit scores to qualify.

Discover it® Business Card

Another good one is the Discover it® Business Card. It has no yearly fee. There is an introductory APR of 0% on purchases for twelve months. Then, the regular APR is a variable 14.49 to 22.49%.

You get unlimited 1.5% cash back on all purchases, with no category restrictions or bonuses. Also, they double the 1.5% Cashback Match™ at the end of the first year. There is no minimum spend requirement either.

You can download transactions easily to Quicken, QuickBooks, and Excel. This one also requires great credit scores.

The thing with credit cards is, you have to be so careful. As with all debt, payments must be made on time. However, the higher interest rates make this a little harder than it typically is with a commercial line of credit.

A Commercial Line of Credit Can Help You Right Now

In this post COVID world, most business owners need money fast. A commercial line of credit is the best way for that to happen, especially if you can get a credit line hybrid. Truly, with the ability to use a credit partner, virtually everyone can access this type of funding. It’s low interest, high limit, fast access to the funds you need to make sure your business thrives regardless of the state of the economy.

The post How to Get a Commercial Line of Credit Right Now appeared first on Credit Suite.

How to Get a Commercial Line of Credit Right Now

How Does Your Garden Grow? Best Business Line of Credit in a Recession

The COVID-19 pandemic caught the world by surprise and turned the economy upside down. If you are a business trying to make it during this time, we can help. The Federal government has approved funding through The CARES Act, including the Paycheck Protection Plan. In addition, many states and local organizations are offering their own COVID-19 relief options. Beyond that, we can help you find the best business line of credit in a recession.

A Business Line of Credit is Like Miracle Grow for Your Business

A business line of credit can be an incredible tool for your business, even in a recession. You don’t want just any line of credit however. You want the best one for your business needs.

Not all businesses are the same, and not all lines of credit are best for all businesses. Different limits, rates, and terms work better for some than others. How do you ensure you are getting the best business line of credit in a recession?

What’s a Line of Credit?

It can help to get a quick rundown of exactly what a line of credit is. The most basic definition is that it is a revolving line of credit, similar to a credit card. You have a limit and continuous access to that limit while making payments only on the portion you use each month.

For example, if you have a $10,000 line of credit, you can use however much of those funds you need each month for whatever you want, unless your lender issues some sort of restriction. If you use $2,000, then when you get your statement your payment will be based on $2,000 plus the interest, rather than a payment plus interest on the entire credit line.

If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.

Access is most typically granted through checks or a card connected to the line of credit account. Electronic draws and transfers are also popular.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

Line of Credit vs. Credit Cards

The question is always asked what the difference is between a line of credit and a credit card, and why is one better than the other? The truth is that in some cases, a credit card may be the better option. There is a choice to make based on several different factors.

The main difference between the two that most borrowers need to know is that a line of credit typically has a consistently lower interest rate. Also, there are no perks like 0% interest or cash back that you sometimes see with credit cards.

What Signifies the Best Business Line of Credit in a Recession?

The best business line of credit in a recession is going to be the one with the best rates and terms that your business can qualify for. That makes finding it a little more involved. You have to know where you stand and what various lenders offer and require.

It will take some leg work on your part to pull together the information needed for application. You will also need to understand that the best business line of credit in a recession may not come from the same place you would have gotten a business line of credit pre-recession. You might have better luck with online lenders or smaller banks over larger traditional banks during an economic downturn.

A Word of Warning

Before you apply for the best business line of credit in a recession, remember that balance is important. Recession times are by default, hard. A line of credit can ease some of the burden, but be careful not to let the credit line itself become a burden. Know your limits as far as what you can pay.

If you do not make payments on-time, you could end up with more trouble than you already had.

How to Find the Best Business Line of Credit in a Recession?

There are several steps to this process.

1. Why do you need a business line of credit in a recession?

Figuring this out could be the most vital step in finding the best business line of credit for your needs. You have to understand why you need a credit line in the first place. Here are some examples of how a business may use a line of credit.

Take advantage of a sale on inventory, raw materials, or supplies. This can reduce the cost of goods sold and consequently, increase the bottom line.
Purchase or repair minor equipment when needed. This would be like a new printer or laptop. It would not include items like an industrial oven or delivery truck. Larger equipment would best be purchased with an equipment loan.
Bridge temporary cash gaps or continuous, known cash gaps due to timing issues. An example of this would be several bills that are due at the beginning of the month when you know your largest contracts pay at the end of the month. The money is coming, but the bills come due before the money gets there. You can pay the bills with the line of credit, then pay off the line of credit when the contracts pay.

Another example of this is a seasonal line of credit for a business that does the majority of its sales during a certain time of the year. A florist does a large percentage of sales during Valentines day, so a seasonal line of credit can come in handy to bridge the cash gap during other times of the year.

2. Determine your options.

Shop around with various financial institutions to determine which ones offer the best business lines of credit in a recession. You will want to look at factors such as interest rate and credit limit in relation to what you need and can afford.

Check with various types of lenders to get a feel for which ones offer what you need. Check with larger commercial banks, small local institutions and credit unions, and alternative lenders such as those that operate exclusively online.

Pay specific attention to eligibility requirements to avoid wasting your time with those you do not qualify for.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

3. Know where you stand.

Your ability to get approval for the best business line of credit in a recession will be directly related to your business credit. Traditional banks pay more attention to personal credit, but they crack down a lot on lending when there is a recession. Non-traditional lenders may also consider income and cash flow. They may, in addition, rely heavily on your business credit score when making an approval decision about a line of credit.

A lower business credit score does not necessarily mean you can’t get approval. It could greatly affect your interest rate and credit limit however.

Consider signing up for a credit monitoring service that lets you keep tabs on your business credit and what is affecting it each month. The one offered by CreditSuite.com is easy to use and cost effective.

Once you have a handle on why you need a business line of credit, what is available, and what you may actually be eligible for, you can make a decision as to where you are going to apply and which product you are going to apply for.

Determining which of these lenders has the best business line of credit in a recession for you goes back to knowing what you need, who has it, and who will approve you for it.

When Is a Line of Credit Better than a Credit Card?

If you are going to need to make payments, a line of credit is a better option. The reason is pretty simple. The credit rate is almost always lower. The few exceptions are those cards that offer 0% APR for a short period of time.

If you are going to use a credit card to make regular purchases you intend to pay off immediately, that’s another story. Especially if you qualify for a card with perks such as cash back. In that case, you may find that you can benefit from using a credit card over a line of credit.

An example would be if you wanted to use your business credit card to make your monthly supplies purchase each month and then pay it off in the following month. You could take advantage of the cash back and reduce your overall cost.

To float a cash flow gap or make significant purchases that you will need to pay out over a short amount of time, a line of credit is almost always the best choice.

Where to Find the Best Business Line of Credit in a Recession

Some small businesses will have a hard time getting approval from a traditional lender due to poor credit or a lack of sufficient credit history. We found examples of what alternative lenders are offering currently. Keep in mind these offerings can change, so make sure to visit the lender and verify.

Kabbage

Kabbage offers a credit line of up to $150,000 with no credit score required. The catch is that the interest rate is between 32% and 108%. The business must have been in existence for at least one year and have revenue of at least $50,000.

The interest rate is very high. This is really only an option for those businesses that cannot get financing due to a low or nonexistent credit score and need funding immediately.

StreetShares

There is a credit line available here of up to $100,000. A business must have what they consider to have “reasonable credit.” It also must be in business for at least one year and have more than $25,000 in revenue. Repayment is weekly.

Due to the lower revenue requirement, this is a good option for smaller businesses with okay credit scores but lower annual revenue. Also, the interest rate minimum is lower, with the low end at 9%.

OnDeck

If you have a credit score of at least 600 you can get a credit line of up to $100,000 with OnDeck. There is a $20 per month maintenance fee and weekly repayment. The interest rate is a little higher here than with those that require a higher credit score minimum. It ranges from 13.99% to 39.99%.

Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement.

Lending Club

The credit line offered by lending club goes up to a limit of $300,000. It requires a credit score of 600. In addition, at least one year in business and at least $50,000 in revenue are necessary. The repayment term is 25 months, and they require collateral for limits over $100,000.

This is a good option for those that meet the requirement as there is a higher limit available with collateral, and the interest rate can go as low as 6.25%. The repayment terms are much friendlier as well.

Credit Line Hybrid: Another Option

A credit line hybrid is revolving, unsecured financing. It allows you to fund your business without putting up collateral, and you only pay back what you use. It even works for startups.

What are the Qualifications?

How hard is it to qualify? It’s probably easier than you think. You do need good personal credit. That is, your personal credit score should be at least 685. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Also, in the past 6 months, you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.

If you do not meet all of the requirements, all is not lost. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.

Business Credit in a Recession

When you apply for the best business line of credit in a recession, consider using your business credit rather than personal credit. Some lenders will require you to use both. If you can get a credit line on your business credit only, that is best. If not, strong business credit can help negotiate better terms and rates.

Learn bank rating secrets with our free, sure-fire guide which can even help during a recession.

Not sure what business credit is, if you have it, or how to get it? Here’s a quick rundown. Business credit is similar to your personal FICO, but it is for your business only. It is not attached to your name or social security number, but rather to your business name and EIN.

The most commonly used business credit reporting agency is Dun & Bradstreet, but there are others. With Dun & Bradstreet however, you must have a DUNS number to have a record with them. If you do not have one, you don’t have a D&B business credit report.

You can get a free DUNS number on the D&B website. Before you do, your business must be incorporated. It also must have dedicated, separate contact information that is not your personal contact information. You can find out more about incorporation options and how to get a free EIN on the IRS website.

It is Possible to Find the Best Business Line of Credit in a Recession

A business line of credit is a great financing option. It offers flexibility that isn’t always available with a term loan. Interest rates are often better than those offered by business credit cards. With alternative lenders in the mix, a line of credit is an option for most small businesses even during a recession.

The post How Does Your Garden Grow? Best Business Line of Credit in a Recession appeared first on Credit Suite.

Fight Back: Get an Unsecured Business Line of Credit in a Recession

The COVID-19 pandemic has quite literally turned the economy on its head. Businesses are suffering, and recession is imminent. Not only that, but aside from the influx of federal funds to the SBA, banks are not going to keep lending so freely for much longer. The time to get funding to help your business survive the recession is now. Still, is it even possible to get an unsecured business line of credit in a recession?

Everything You Need to Know Before You Apply for an Unsecured Business Line of Credit in a Recession

Even during a recession, it is almost impossible to run a business without financing. At some point you will need a large supply of cash that you do not have. Even if you do have sizeable cash reserves, it is typically not a good idea to deplete them all at once. A line of credit can be a huge help, because the credit line is revolving. This means you do not have to continually apply for it. It is just there to use as needed. The problem is, small business lending drastically decreases during a recession. How do businesses survive then? How can you get an unsecured business line of credit in a recession?

Before You Learn How, Learn Why

Before the how, know the why. An unsecured business line of credit in a recession can help you make repairs, cover a cash gap, or just take advantage of an awesome wholesale promotion without reapplying for credit. You are likely not going to have all the cash on hand. This is especially during a recession.

Even if you do, a business line of credit is a great way to build business credit and manage cash flow. If you use it properly. The question then becomes not “if” you need business financing, but rather “what type” of business financing do you need.

The options are many. Which one is best for your business will depend on multiple factors. There are both unsecured and secured lines of credit, term loans, various types of invoice lending, credit cards and more. During hard economic times, some financing options are more available than others. The greatest cutbacks on lending are in the larger banks. Typically, traditional term loans are squeezed the hardest.

Therefore, finding an unsecured line of credit in a recession isn’t impossible. It may not be as easy to come by as during an economic boom, but it is possible. You are likely to have better luck at the smaller banks.

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

The Fine Print

Under each lending option there are sub options for specific types of borrowers, specific borrower needs, secured, unsecured, and even options with cash back and other rewards.

The best way to make a decision is to learn as much as you can about each one. Do this before you need financing. Then when the time comes, you already know what you need.

The unsecured line of credit is one option that is often misunderstood. It can be difficult to determine why you would choose this option over a secured line of credit or a term loan, and if you do, what are the benefits?

Why Choose a Line of Credit?

The best way to explain this is to line up the unsecured line of credit head to head with the most commonly used other options.

Unsecured Line of Credit in a Recession vs. Term Loans

Besides the fact that it is much harder to get a term loan during a recession, the answer here is pretty straight forward. If you need cash occasionally for various reasons, a line of credit is your best bet. If you have a large, specific purchase or project, then a term loan could work better depending on a number of variables.

Consider the following scenarios:

One company is beginning to see cash gaps due to a lag in customer payments. The recession is hitting everyone hard, and while no one has completely stopped paying, the average time receivables stay on the books has increased. In this situation, a line of credit is the best option. You will have the financing to use from month to month. Also, you can take only what you need, and pay it back once the invoices are paid.

The next company needs to add another truck to its fleet to handle the shipping for increased orders. This kind of growth is fortunate given the recession, but they need to finance the truck. In this situation, a term loan would be best. It may be difficult to find given the slow economy, but the smaller banks may just come through.

Unsecured Line of Credit in a Recession vs. a Business Credit Card

A credit card is very similar to a line of credit. Most often the glaring difference is the use of a card, though some business lines of credit offer a card for access in addition to checks. Similar to how some credit cards offer checks for access as well as a card.

Another difference is that sometimes you can use your lending institution’s online banking option to make direct transfers from a line of credit to a checking account, if the accounts are at the same institution. Also, if you need cash, there is no cash withdrawal fee usually with a line of credit. Credit card cash advance fees can expensive.

Credit cards tend to have higher interest rates than business lines of credit also, though unsecured lines of credit in a recession can have very high interest rates as well.

What if You Could Have Both? Credit Line Hybrid

What if there were an option that allowed you to have an even better interest rate than a secured loan, and yet get the money faster and easier than any type of traditional funding. What if you could get business funding similar to an unsecured business line of credit without having to supply any bank statements or check stubs? Imagine that you could get funding in a few days rather than weeks without supplying any collateral or documents? This is exactly what the credit line hybrid allows you to do.

What is a Credit Line Hybrid?

A credit line hybrid is basically revolving, unsecured financing. It allows you to fund your business without putting up collateral, and you only pay back what you use.

What are the Qualifications?

How hard is it to qualify? Not as hard as you may think. You do need good personal credit. That is, your personal credit score should be at least 685. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Also, in the past 6 months, you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It’s also preferred that you have established business credit as well as personal credit.

Unsecured Line of Credit in a Recession vs Secured Line of Credit

Now that you can see the benefit of using a line of credit over other financing options in certain situations, you need to know when and why to choose an unsecured line of credit.

The fact is, an unsecured line of credit in a recession, or in times of a strong economy, is harder to get. It typically has the higher interest rate of the two as well.

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

This is due to increased risk to the lender. A secured business line of credit has collateral. If you don’t pay, the lender can still use the collateral to recover some if not all of the loss.

Some business owners either do not have collateral to offer, or they have no interest in tying up their assets with financing. In these cases, they may be able to get line of credit without security.

An unsecured line of credit in a recession typically has strict approval guidelines and qualifications. Due to the increased credit risk, it will likely have higher interest rates and less favorable repayment terms as well.

Where Can You Find an Unsecured Line of Credit in a Recession?

As a general rule, the same places you could any other time. Not all lenders offer this as a product, but there are options available at many traditional and alternative type lenders. Which one you go with depends, again, on your specific situation. During an economic downturn, alternative lenders may be your best bet.

Traditional lenders offer the lowest interest rates, but their repayment terms may be less flexible. They will also have qualifications that are harder to meet and a longer approval process. In addition, it can take several days after approval to have access to the funds.

An alternative lender will usually have easier to meet qualifications and more flexible repayment terms, but the interest rates are much higher. The approval process is much faster though, and usually takes place all online. In some cases, you can have access to funds in as little as 24 hours.

Application Preparation

The items you need to apply for an unsecured line of credit in a recession are the same as what you would need for any other time. It will vary from lender to lender, but a general list includes:

· Bank statements

· Financial statements

· Tax returns

Some lenders will check your business credit score, and sometimes even your personal credit score as well. A score of 620 is usually the minimum requirement for approval, but some alternative lenders do not require a minimum score. Some traditional lenders may require a higher score for an unsecured business line of credit in a recession than it would otherwise.

They are looking for minimum annual revenue as well. Traditional banks are more likely to grant approval at $180,000 or more of revenue annually. Alternative lenders usually have a lower threshold.

Basically, lenders want to see how long you have been in business and what your annual revenue is, thought exactly what they need to see to grant approval varies from lender to lender.

Examples of Unsecured Line of Credit in a Recession Options from Real Lenders

Seeing exactly what types of products are currently available from real lenders can be helpful in understanding the difference between what traditional and alternative lenders offer. Please note that lenders change product offerings and terms at their leisure, and then a change in economic client with trigger a change. Therefore, there is no guarantee these products have not been adjusted since this writing.

Traditional Lenders

Bank of America

There is currently an unsecured line of credit product available from Bank of American that ranges from $10,000 to $100,000. There is a $50 origination fee if approved. The origination fee is a limited time offer. It is usually $150.

A business must have been in business for two years and have a minimum of $100,000 in annual revenue to qualify.

Alternative Lenders

Fundbox

The unsecured line of credit offered by Fundbox goes up to $100,000. You will also have to have a business bank account.

The interest rate will increase based on annual revenue and time in business.

OnDeck

OnDeck offers an unsecured business line of credit of up to $100,000. You repay it weekly for up to 6 months.

Check out how our reliable process will help your business get the best business credit cards, even during a recession.

Blue Vine

This one ranges from $5,000 to $250,000. The repayment term is from 6 to 12 months.

StreetShares

With repayment terms from 3 to 36 months, this is a good option if you qualify. Amounts start at $5,000 and range up to $150,000. They also offer some specialty products with lower interest rates.

An Unsecured Business Line of Credit in a Recession Is a Viable Option

Even if the recession has caused lenders to cut back, an unsecured line of credit in a recession could be an option. It is way better than a term loan during a recession for a number of reasons. The first is that you can control payments.

A term loan requires a set payment each month, while a line of credit requires you only to make payments on the amount you use. If you only use what you need, you will very likely come out with a lower monthly payment.

If you don’t have collateral or do not want to tie up your assets with financing, an unsecured line of credit is an option. The repayment only on what you use may cost less than an unsecured term loan despite the higher interest due to being unsecured.

The bottom line is that an unsecured business line of credit can be more costly than a secured line of credit, but less costly than a term loan. While they are easier to get if you have been in business longer, have higher annual revenue, and have a great credit score, they are not impossible to get without these things. If you are not sure how much you need, or the need could vary, and you do not want to tie up assets or do not have assets to offer as security, then an unsecured business line of credit could be for you.

The post Fight Back: Get an Unsecured Business Line of Credit in a Recession appeared first on Credit Suite.

Credit Line Hybrid: The Top Option for Unsecured Business Financing You Probably Don’t Know About

The introduction of COVID-19 into our world crashed the global economy. The federal government has taken action to try and help business owners. The Paycheck Protection Program Loans and Economic Injury Disaster Loans are both included in the CARES Act as help for small business owners. What are the SBA loan requirements for each of these business funding programs, and do you qualify? Maybe. The money is pretty much already gone however. They say more is coming, but when, and how much? In the meantime, the credit line hybrid could be what gets you through.

Get funding to help your business thrive right now.

Credit Line Hybrid Financing: The Top Option for Unsecured Business Financing You Probably Don’t Know About

Whether the economy is booming or in the depths of a recession, one thing never changes. All businesses need funding. What does change, are the funding options available. This is not because the options go away. Rather, it is due to the fact that some businesses may lose their eligibility for certain business funding options during hard economic times. To know which one will work best for you in your current situation, you need to know about and understand all of them. Here is a quick 101 on what is available, how you get it, and a bonus option you probably did not know about, the credit line hybrid.

It is hard to understand how awesome a credit line hybrid is if you do not understand the different types of funding out there. Specifically, it helps to understand what the government is offering, the pros and cons related to the government relief, and the difference between secured and unsecured financing.

Why Apply for a Credit Line Hybrid When There Is Government Covid-19 Relief

The Paycheck Protection Program is a business lending program. It is designed to help businesses keep paying employees even when they are shut down due to the coronavirus pandemic. Allowable uses of funds include:

Payroll Expenses
Employee Salaries
Mortgage Interest
Rent and Utilities
Interest on debt incurred before February 15, 2020

The annual percentage rate for these loans is 4%. You do not make any payments for the first 6 months. However, interest does accrue during this time. After that, you have 2 years to pay. These loans are up to 100% forgivable with approval.

Loan Forgiveness

To request forgiveness, you will submit a request to the lender that is servicing the loan. It should include documents that verify the number of full-time employees and pay rates. Also, you will need to verify the payments on eligible mortgage, lease, and utility obligations. You have to certify that the documents are true. In addition, you will have to show that you used the forgiveness amount to keep employees. If not, you will have to show the funds were used to make eligible mortgage interest, rent, or utility payments. The lender must make a decision on the forgiveness within 60 days.

First, the program is open through June 2020. Not only does that not give you a lot of time, but you need to apply as soon as possible anyway. There is a cap on the funding, and processing applications will take time. Consequently, some lenders are limiting the number of applications they will accept in a single day.

SBA Loan Requirements: Who Can Apply, When Can they Apply, and Where Can They Apply?

Existing SBA lenders started accepting applications on April 3, 2020 from small businesses and sole proprietorships with less than 500 employees. Beginning on April 10, independent contractors and individuals that are self- employees can apply through SBA lenders.

Other lenders besides those that are currently working with the SBA are able to get in on the fun as well. In an effort to relieve some of the burden of processing, other lenders are able to enroll in the program and will be able to start accepting applications as soon as they get approval. Additionally, many private lenders have joined a petition to be able to work with the SBA to process applications and distribute funds.

SBA Loan Requirements: What Do You Need to Apply?

It is pretty straight forward. If you meet the SBA definition of a small business or contractor, you just have to make a few good faith certifications. These include:

Current economic uncertainty makes the loan necessary to support your ongoing operations.
You will use the funds to keep workers and maintain payroll or to make mortgage, lease, and utility payments.
This is the only loan you have or will have under the program.
You will provide all documentation necessary to verify the number of full-time employees on payroll and how much their payroll costs. Also, you will provide any necessary documentation needed to verify mortgage interest payments, rent payments, and covered utilities for the eight weeks after getting this loan.
Loan forgiveness will be available for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities.
All the information you provide in your application and supporting documents and forms is true and accurate.
You realize that the lender will calculate the loan amount using the tax documents you submitted. You guarantee that the tax documents are identical to those you submitted to the IRS.

SBA Loan Requirements: The Economic Injury Disaster Loan Program

These are funds you apply for directly from the SBA. They can be used to cover the following expenses:

Payroll
Fixed Debts
Accounts Payable
Other expenses that cannot be paid because of the impact of the disaster. In this case, the disaster being COVID-19.

These loans are available up to $2 million dollars at an annual percentage rate of 3.75%. The terms go up to 30 years. These are not forgivable loans.

Why Apply for a Credit Line Hybrid with Government COVID-19 Relief Available?

New funding was recently allotted. But how long will it last this time around? And how soon can the funds come to a business? The truth is, most business owners need money right now. There are other options, and the credit line hybrid is at the top of the list.

Credit Line Hybrid: Secured vs. Unsecured

Next, it can be helpful to fully understand the difference between secured funding and unsecured funding. The foundational difference is that secured funding uses collateral to lower the lender’s risk. This allows the lender to offer lower interest rates and better terms. Unsecured funding does not require collateral, but the lender’s risk is mitigated by higher interest rates.

Credit Line Hybrid: Why Choose Unsecured?

If unsecured financing has higher interest rates, why would you choose it? First, if you do not have anything available to use as collateral, you do not have a lot of choice. Next, even if you do have assets you can use to secure the loan, you may not want to take that risk. If you use your home or some other asset as security for debt, you’ll lose it if for some reason you cannot meet the obligation.

By choosing an unsecured loan, you protect your personal assets, to a point. You will not lose your business to the lender, or any other type of collateral, because there is no collateral.

Credit Line Hybrid: The Downside to Unsecured Financing

Of course, every rose has its thorn. While you will not be losing an asset directly because it secures the loan, you will still be liable for the debt. This is especially true if the debt is based on your personal credit, meaning it is in your name and not the name of an incorporated business.

Credit Line Hybrid: An Amazing Happy Medium

What if there were an option that allowed you to have an even better interest rate than a secured loan, and yet get the money faster and easier than any type of traditional funding. What if you could get business funding without having to supply bank statements or credit stubs? Imagine that you could get funding in a few days rather than weeks without supplying any collateral or documents? This is exactly the credit line hybrid allows you to do.

What is a Credit Line Hybrid?

A credit line hybrid is basically revolving, unsecured financing. It allows you to fund your business without putting up collateral, and you only pay back what you use.

Credit Line Hybrid: Qualifications?

How hard is it to qualify? Not as hard as you may think. You do need good personal credit. That is, your personal credit score should be at least 685. In addition, you can’t have any liens, judgments, bankruptcies or late payments. Furthermore, in the past 6 months you should have less than 5 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards. It is also best that you have established business credit as well as personal credit.

If you do not meet all of the requirements, it is okay. You can take on a credit partner that meets each of these requirements. Many business owners work with a friend or relative to fund their business. If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding.

What are the Benefits of a Credit Line Hybrid?

There are many benefits to using a credit line hybrid. First, it is unsecured, meaning you do not have to have any collateral to put up. Next, the funding is what is referred to as “no doc”. This means you do not have to provide any bank statements or financials.

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Additionally, often you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business.

The process is pretty fast, especially with a qualified expert to walk you through it. One other benefit is this. With the approval for multiple credit cards, competition is created. This makes it easier, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

How to Best Use the Funds Available Through a Credit Line Hybrid

Maybe you think you do not need funding. Everything is bumping along just fine, and there is no reason to access any additional funds. Even if you are not in a dire situation, there are a ton of ways to use additional funds to help your business continue to grow. Here are some tips on how to use funds from a credit line hybrid to best benefit your business.

Tips for Using a Credit Line Hybrid

Pay off higher interest debt to lower monthly payments and increase credit score. Imagine using a 0% interest credit line to pay off a number of high interest credit cards. You could literally save yourself hundreds of dollars a month that can then be put back into your business.
Bridge a cash gap due to slow collections or seasonal issues. You could never have to worry or stress about large invoices being paid slowly or slow business in the off season ever again.
Cover bills during a global pandemic. Can you relate? COVID-19 turned the whole economy on its head. Funds from a credit line hybrid can help you stay above water without waiting for or just hoping you can get government relief.
Buy inventory in bulk to take advantage of promotional pricing. You know you’ve seen it happen. Your best seller goes on sale with the wholesale company. But you can’t buy as much as you want at the discounted price because of cash flow.
Grow and expand your business by adding equipment, adding on to your building, or even opening a new location.
Fund updates and repairs. Do not let the little things, or big things, slide any longer because you can’t pay for it. Get the repairs you need, do the updates that need doing, and watch your business thrive.
Nothing. Leave it alone until you need it. None of us can see into the future. A safety net is always a good idea.

Bonus: You can even use a credit line hybrid to help with the cost of starting a brand new business.

A Credit Line Hybrid Can Help You Build Business Credit

Building business credit is vital to the success of your business, and a credit line hybrid can help you do just that. The key is, a credit line hybrid includes approval for multiple business credit cards at once. If your business is set up properly, they will report your on-time payments to the business credit reporting agencies. These include Dun & Bradstreet, Experian, and Equifax mostly, though there are others. Not all of them report to all of the CRAs, but some of them report to at least one. Each account reporting consistent on-time payments helps you build strong business credit.

You Have to Set Your Business Up Properly to Build Business Credit with the Credit Line Hybrid

Your business has to be set up a certain way to build business credit, period. If it is not, then payments on business accounts will simply report to your personal credit. Here is how to do it.

Get Separate Contact Information Before You Apply for the Credit Line Hybrid

Really, all of these steps should be completed before you apply for any type of business credit. First, make sure your business has its own phone number, fax number, and address. Surprisingly, that does not mean you have to get a separate phone line, or even a separate location.

In fact, you can get a business phone number and fax number that will work over the internet instead of phone lines. In addition, the phone number will forward to any phone you want. You can just use your personal cell phone or landline.

For a business address, you can use a virtual office. This is not what you may think. It is a business that offers a physical address for a fee. Sometimes they even offer mail service and live receptionist services. Some of them even offer space for face-to-face meetings.

Apply for an EIN to Use on Credit Applications

The next thing you need to do is get an EIN for your business. This is an identifying number for your business that works like your SSN does for you personally. You can get one for free from the IRS.

Be wary of using a CPN to try to fake good credit. What is a CPN? It stands for Credit Protection Number, Credit Privacy Number, and a number of other similar terms. A CPN is a number that you can use in place of your social security number, in some situations. They are completely legal, if you get them the right way.

The thing is, there are very specific rules about who actually qualifies for a legal CPN. In addition, you have to go through an attorney to get a legal CPN. However, there are some unscrupulous companies that will sell them claiming that you can use them to apply for credit, and thus elude your poor credit scores.

Many of the numbers for sale come from children or dead people. Once you use one, you have just committed identity fraud. Also, it will not even really help you that much. The only number you can use to apply for credit other than your SSN is an EIN. Even then, you may have to give your SSN for identity purposes, even if it is not used to verify credit worthiness.

Incorporate Your Business

Incorporating your business as an LLC, S-corp, or corporation is necessary. It officially separates your business from you as the owner. It also offers some protection from liability.

Which option you choose does not matter as much for business credit as it does for your budget and needs for liability protection. Talk to your attorney or a tax professional about that.

Open a Business Bank Account

You have to open a separate, dedicated business bank account. There are a few reasons for this. First, it will help you keep track of business finances. It will also help you keep them separate from personal finances for tax purposes.

It is necessary to take care of all of these things before applying. First, you need your EIN and your separate contact information on the application. Next, the fact that you are incorporated and your business has a separate, dedicated account will help solidify it as an entity separate from you personally.

Why Does Building Business Credit Matter?

Business credit is one piece of your business’s overall fundability. In fact, it is the biggest piece of fundability. However, the other things that contribute to the fundability of your business are important as well. Each one is needed, and the stronger each piece is the stronger your overall fundability is. In contrast, one weak link can bring it all tumbling down. Still, without strong business credit, none of it really works.

Business credit allows you to access money for your business without putting your personal credit at risk. If your business goes south and your business credit tanks, it will not impede your ability to buy a car or a house.

Also, you can access more funds using business credit than with personal credit. That is because credit limits on business credit cards are typically much higher than those on personal cards.

Fundability, in the simplest terms, is the ability of your business to get funding. When lenders consider funding your business, does it appear to them to be a good idea to make the loan? What do they look at to make that determination? What plays into fundability other than business credit?

Credit Line Hybrid: Other Fundability Factors

It is a complicated web of data that creates business fundability. Pretty much, everything in the history of ever can affect the fundability of your business, but time is kind. The more positive, recent information out there, the better off you are. New positives allow older negatives to not matter as much, eventually.

Licenses

For a business to be legitimate it has to have all of the necessary licenses it needs to run. If it does not, red flags are going to fly up all over the place. Do the research you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels.

Website

I am sure you are wondering how a business website can affect your ability to get funding. The thing is, these days you do not exist if you do not have a website. However, having a poorly put together website can be even worse. It is the first impression you make on almost everyone. If it appears to be unprofessional it will not bode well for you with consumers or potential lenders.

Spend the time and money necessary to ensure your website is professionally designed and works well. Pay for hosting too. Do not use a free hosting service. Along these same lines, your business needs a dedicated business email address. Make sure it has the same URL as your Website. And do not use a free service such as Yahoo or Gmail.

Information from Other Business Data Agencies

In addition to the business credit reporting agencies that directly calculate and issue credit reports, there are other business data agencies that affect those reports indirectly. Two examples of this are LexisNexis and The Small Business Finance Exchange. These two agencies gather data from a variety of sources, including public records. This means they could even have access to information relating to automobile accidents and liens. While you may not be able to access or change the data the agencies have on your business, you can ensure that any new information they receive is positive. As mentioned earlier, enough positive information can help counteract negative information from the past.

Identification Numbers

In addition to the EIN, there are identifying numbers that go along with your business credit reports. You need to be aware that these numbers exist. Some of them are simply assigned by the agency, like the Experian BIN. One, however, you have to apply to get. It is absolutely necessary that you do this.

Dun & Bradstreet is the largest and most commonly used business credit reporting agency. Every credit file in their database has a D-U-N-S number. To get a D-U-N-S number, you have to apply for one through the D&B website.

Business Information

On the surface, it seems obvious that all of your business information should be the same across the board everywhere you use it. However, when you start changing things up like adding a business phone number and address or incorporating, you may find that some things get missed.

This is a problem because a ton of loan applications are turned down each year due to fraud concerns simply because things do not match up. Maybe your business licenses have your personal address but now you have a business address. That sets off red flags. Perhaps some of your credit accounts have a slightly different name or a different phone number listed than what is on your loan application. Do your insurances all have the correct information?

Financial Statements

This includes both personal and financial. First, tax returns need to be in order. Not only that, but you need to be paying your taxes, both business and personal. That is not all there is to it though.

Business Financials

It is best to have an accounting professional prepare regular financial statements for your business. Having an accountant’s name on financial statements lends credence to the legitimacy of your business. If you cannot afford this monthly or quarterly, at least have professional statements prepared annually. Then, they are at the ready whenever you need to apply for a loan.

Personal Financials

Often tax returns for the previous three years will be good enough. Get a tax professional to prepare them. This is the minimum you will need. Other information lenders may ask for include check stubs and bank statements, among other things.

Bureaus

There are several other agencies that hold information related to your personal finances that you need to know about. Your personal FICO score needs to be as strong as possible. Almost all traditional lenders will look at personal credit in addition to business credit.

In addition to FICO reporting personal credit, there is ChexSystems. Basically, they keep up with bad check activity that can affect your bank score. If you have too many bad checks, you will not be able to open a bank account.

Personal Credit History

Your personal credit score from Experian, Equifax, and Transunion are all important to fundability. If it is not so great right now, get to work on it. The number one way to get a strong personal credit score or improve a weak one is to make payments consistently on time.

The Application Process

It is hard to imagine that even the very process of applying for funding can affect fundability. First, consider the timing of the application. Is your business currently fundable? If not, do some work first to increase fundability. Next, ensure that your business name, business address, and ownership status are all verifiable. Lenders will check into it. Lastly, make sure you choose the right lending product for your business and your needs. Is a credit line hybrid right for you? It is pretty much right for everyone that either meets the requirements or have family or friends who do. Would a working capital loan or expansion loan work best for your needs? Choosing the right product to apply for can make all the difference.

Get funding to help your business thrive right now.

Other Funding Options Besides a Credit Line Hybrid

The credit line hybrid really is a great option. In fact in most cases, it is likely the best option. However, it is not always enough. What other business funding options are out there?

SBA Loans

In addition to the SBA funding set up through the CARES Act, regular SBA programs are still out there. SBA loans are guaranteed by the Small Business Administration. Typically, they are issued by participating lenders, mostly banks.

While they sound awesome, they are not as easy to get as you might imagine. The process is certainly more complicated and lengthy than that of applying for a credit line hybrid. Basically, SBA loans are traditional loans from traditional lenders, but they come with a government guarantee. This means lenders can relax a little on credit score requirements. Also, interest rates are lower. However, there is still a lot of red tape and time involved.

SBA Loan Documentation

Here is what you’ll need to apply.

The SBA borrower loan information form
Statement of personal history
Personal financial statement
Personal income tax returns for the previous 3 years
Tax returns for the business for the previous 3 years
Business certificate or license
Business lease
Loan application history
Good business credit helps also

It can take a considerable amount of time to finish the application process, and even longer to get your money.

Once you have this general information together, you need to choose the program that will work best for your needs. Note that each program may have additional requirements.

7(a) Loans

This is the Small Business Administration’s flagship loan program. It offers federally funded term loans up to $5 million. The funds can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds.

The minimum credit score to qualify is 680, and there is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. In the case of startups, business experience equivalent to two years will fulfill this requirement.

This is by far the most popular of the SBA loan programs, and the funds are available for a broad range of projects. This program is great for working capital, refinancing debt, and even buying a new business or real estate.

504 Loans

These loans are also available up to $5 million and can buy machinery, facilities, or land. They are generally used for expansion, and private sector lenders or nonprofits process and disburse these SBA government loans. They work well for commercial real estate purchases especially.

Terms for 504 Loans range from 10 to 20 years, and funding can take from 30 to 90 days. They require a minimum credit score of 680, and collateral is the asset it is financing. There is also a down payment requirement of 10%, which can increase to 15% for a new business.

There is also a requirement you be in business at least 2 years, or that management has equivalent experience if the business is a startup.

Microloans

Microloans are available in amounts up to $50,000. They work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based non-profits administer microloan programs as intermediaries. Unlike most other SBA loans, financing comes directly from the Small Business Administration.

Interest rates on these loans are 7.75% to 8% above the lender’s cost to fund. The terms go up to 6 years. Microloans can take upwards of 90 days to fund, and the minimum credit score requirement is 640. Collateral and down payment requirements vary by lender.

SBA disaster loans

The disaster loan program is designed to help out in times of disaster, such as hurricanes and tornadoes. Recently, the program has been ramped up to provide COVID-19 relief as part of the CARES Act.

Available in amounts up to $2 million, these loans are processed directly through the SBA. They are available to small-business owners that have been affected by natural disasters. Terms go up to 30 years. The maximum interest rate is 4%. Apply for disaster loans directly at SBA.gov.

The minimum credit score for disaster loans is 660. Collateral is necessary if the loan goes over a certain amount, usually $25,000, if it is available or when it becomes available. For a military economic injury disaster that amount is $50,000. A down payment is not necessary.

SBA Express loans

These loans top out at $350,000. They have a maximum interest rate of 11.50%. Terms range from 5 to 25 years, and the SBA guarantee is less than with their other loan programs at 50%. To qualify, your credit score must be above 680, and you must have a debt to service ratio of 1.1 or higher. If the loan is greater than $25,000, collateral may be necessary depending on the lender.

The turnaround for express loans is much faster, with the SBA taking up to 36 hours to give a decision. Necessary paperwork for application is less also, making express loans a great option for working capital, among other things, if you qualify.

SBA CAPLine

There are 4 distinct CAPline programs. The differences between them relate mostly to the expenses they can fund. Each of them carries a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. Funding can take 45 to 90 days.

The four different programs are:

Seasonal CAPLines -Financing for businesses preparing for a seasonal increase in sales.
Contract CAPlines -Financing for businesses that need funding to fill a contract.
Builder’s CAPLines -Financing for businesses taking on a real estate or construction project.
Working capital CAPLines -Financing for businesses that are struggling with a short-term slump in sales.

Credit score must be at least 680 to qualify, and there is no minimum time in business requirement unless you are getting a seasonal CAPline. That one carries a one year in business requirement.

You may have noticed that the credit score requirements for the SBA loans are generally in the same range as what is required to qualify for a credit line hybrid. As a result, it is highly possible you could get both an SBA loan and a credit line hybrid, if you meet the qualifications for both. This would greatly increase your business funding power.

Private Lender Loans

These are term loans, but they are offered by private lenders rather than traditional financial institutions. The appeal of these lenders is that they generally offer loans to those with much lower credit scores than what is offered by regular banks and credit unions. Some will lend funds without even checking credit.

Typically, you get the money very fast. Sometimes you can have funding in your account in as little as a couple of days.

There is a trade-off, however. Private loans almost universally have higher interest rates and less favorable terms.

BlueVine

BlueVine offers invoice factoring and lines of credit. For invoice factoring, there are no reserves or minimums. The BlueVine system syncs with your accounting software and they connect to QuickBooks Online. They also work directly with FreshBooks and Xero.

Bond Street

Bond Street offers term loans of $10,000 – $1 million. Terms are for 1 to 3 years. Bond Street will ask for both EIN and SSN.

Lending Club

Lending Club offers term loans. Business loans from $5,000 to $300,000. Loan terms 1 – 5 years.

Get a quote in less than 5 minutes. Funds are available in as little as 48 hours if approved. There are no prepayment penalties. The good thing is the annual revenue requirement is not too high. Also, funds are available quickly. Still, the max interest rates are pretty high.

OnDeck

OnDeck offers short term loans and lines of credit. For short term loans: $5,000 – $250,000. Terms range from 3 to 24 months.

You must have annual revenue of $100,000 or more. Personal FICO Score of 600 or better. You must be in business 3 years or more. There is an 8.5% – 79% APR.

For lines of credit: $5,000 – $100,000 available. There is a term of 6 months.

You must have annual revenue of $100,000 or more. Personal FICO Score of 600 or better. You must be in business 9 months or more. There is a 13.99% to 36% APR.

Advantages include the low FICO score requirement for term loans. There is some flexibility for term lengths. Disadvantages are the maximum APR for both term loans and lines of credit are extremely high. If your company cannot pay back a loan or line of credit, it could sink you financially.

QuarterSpot

Quarter Spot offers short term loans of $5,000 – $150,000. Terms range from 9 to 18 months. They will only do a soft credit check when you apply. Borrowers must own at least 50% of the business. Rates are 25% – 40%.

Rapid Advance

Rapid Advance offers standard, select, and preferred loans. For standard loans amounts range from $5,000 to $1 million available. Terms range from 4 to 12 months.

Benefits including a few choices for loan types and high maximum amount limits. On the downside, minimum bank balance requirements are fairly high. Annual revenue requirements are also high.

More on Invoice Financing

You may have noticed some of the online lenders mentioned above offer invoice factoring. This is a form of business funding that uses open invoices as security. Money comes fast, but interest rate and terms can vary depending on the age of the invoices.

That of course, means that you must have open invoices to qualify. Consequently, you must be extending credit to customers in some form. Usually this involves invoices with net terms, such as net 30, 60, or 90.

Then, you turn those invoices over to a factoring company. They give you an agreed upon percentage of the total of the invoices, such as 80%. You get this amount of money immediately. When your customer pays, the factoring company keeps their agreed upon fee, and they send you the rest.

Details

This is different from selling invoices, in which you sell your invoices at a premium and do not collect anything else. The buyer then tries to collect the full price from the customer and keeps it, profiting from the premium they were sold at. This is more typical with severely delinquent invoices.

You can factor invoices on an ongoing basis to help with cash flow, or you can do it to aid in a one-time cash crunch. It is quick, but it can be costly. If you are an established business that has little problem collecting on invoices however, this funding option is easy to qualify for. Since the funds are secured with the invoices, there is little worry about credit rating.

Merchant Cash Advance

This is similar to inventory financing, except funding is based on average daily credit card sales. Then, payment is made from future credit card sales, automatically.

Lines of Credit

These come from all of the same types of lenders we’ve mentioned already, with the same general requirements. However, this is revolving credit, more like a credit card. Interest rates are typically lower than credit cards, and the application process is virtually exactly like that of a term loan at the corresponding lender. They are available through both traditional banks and private lenders.

Business Credit Cards

This is revolving credit that is usually easier to get than a line of credit. However, the interest rate is almost universally higher, depending on your credit score. In some cases, there are rewards that, in addition to easy access, make these a good option.

Examples of Business Credit Cards to Get You Started

Benefits can vary. So, make certain to choose the card with the ones that will work best for your needs.

Brex Card for Startups

This Brex Card has no yearly fee. You will not need to supply your Social Security number to apply. Also, you will not need a personal guarantee. However, This card does not work for every industry.

To determine creditworthiness, Brex checks a company’s cash balance, spending patterns, and investors. Rewards include 7x points on ride share and 4x on Brex Travel. Also, you can get triple points on restaurants and get double points on recurring software payments. Get 1x points on everything else.

Capital One® Spark® Classic for Business

The Capital One® Spark® Classic for Business is another to check out. It has no annual fee and there is no introductory APR offer. The regular APR is a variable 24.49%. However, you can get unlimited 1% cash back on every purchase for your company and there is no minimum to redeem.

While this card is within reach if you have fair credit scores, be aware of the APR. If you can pay promptly, and completely, it is a good deal.

Ink Business Unlimited℠ Credit Card

The Ink Business Unlimited℠ Credit Card has no annual fee and a 0% introductory APR. After that expires, the APR is a variable 14.74 to 20.74%.

You can earn unlimited 1.5% Cash Back rewards on every purchase made for your company and get $500 bonus cash back after spending $3,000 in the initial 3 months from account opening. Rewards rewards for cash back, gift cards, travel and more using Chase Ultimate Rewards®. You will need superb credit to get approval for this card.

Blue Business® Plus Credit Card from American Express

The Blue Business® Plus Credit Card from American Express also has no no annual fee and a 0% introductory APR for the first year. After that, the APR is a variable 14.74 to 20.74%.

You can get double Membership Rewards® points on everyday business purchases like office supplies or client dinners. This applies to the first $50,000 spent each year. You get 1 point per dollar after that. You will need great to exceptional credit to qualify.

American Express® Blue Business Cash Card

Another one to look into is the American Express® Blue Business Cash Card. Note: the American Express® Blue Business Cash Card is identical to the Blue Business® Plus Credit Card from American Express. However its rewards are in cash instead of points. You get 2% cash back on all eligible purchases up to $50,000 per calendar year. After that, it is 1%.

There is no yearly fee, and there is a 0% introductory APR for the first one year. Afterwards, the APR is a variable 14.74 to 20.74%. You will need great to superb credit to qualify.

Capital One ® Spark® Cash for Business

Check out the Capital One® Spark® Cash for Business. It has an introductory $0 annual fee for the initial year. After that, this card costs $95 per year. There is no introductory APR deal. The regular APR is a variable 18.49%.

You can get a $500 one-time cash bonus after spending $4,000 in the first 3 months from account opening. Get unlimited 2% cash back. Redeem any time without any minimums. You will need great to outstanding credit scores to qualify.

Discover it® Business Card

Another one to check out the Discover it® Business Card. It has no yearly fee. There is an introductory APR of 0% on purchases for twelve months. After that is over, the regular APR is a variable 14.49 to 22.49%.

You can download transactions easily to Quicken, QuickBooks, and Excel. Note: you will need great to exceptional credit to get approval for this card.

Get funding to help your business thrive right now.

Crowdfunding

Crowdfunding sites allow you to inform thousands of micro investors about your business or business idea. Anyone who wants to can invest as much or as little as they want. Investors pledge various amounts depending on the campaign and the platform in use. They may give $50, they may give $150, or they may give over $500. Pledges can even go as low as $5.

Though not always necessary, most offer rewards to investors for their giving. Typically, this comes in the form of the product the business will be selling. Different levels of giving result in different rewards. For example, a $50 gift may get you one incentive, and a $100 gift will get you an upgraded version of that incentive, or something different all together.

Where Do You Get Started with Crowdfunding?

There are many crowdfunding sites, but the most popular are Kickstarter and Indiegogo. Many crowdfunding resources are geared toward aiding in success on these two platforms. The two are similar, but there are some glaring differences. The most obvious is when you actually get the funds you raise.

For example, with Kickstarter you have to reach your preset goal before you can receive the funds. If you set a goal to raise $12,000, investments have to reach that amount before you get your hands on any of the money.

Indiegogo on the other hand lets you choose if you want to receive funds as they come in or wait until you reach your goal. In addition, they have the option for InDemand, which lets you continue to raise funds after your initial campaign is over. There is no need to start a new campaign.

Indiegogo also has a flexible funding option for those who may need it.

To make the choice for yourself, you need to figure out who your audience is, and which platform will best reach them.

Angel Investors

According to Investopedia, this is what an angel investor is:“… [They] invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages.”

These investors are usually only in for a one-time deal. Many do not lend to the same person twice, even if that person paid them back perfectly. They choose to spread their risk out over many people and many businesses to ensure they get a safe return on their investment.

Angels tend to be a lot more informal than most types of funding. They can be people you know or connect with through networking or other means. Even your mom can be an angel investor.

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. But a lot of them are accredited investors anyway.

Who Else Can be This Kind of Investor?

There are a number of angels who are not millionaires. They could be friends or colleagues sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you do not know so well. If you’re asking, where are angel investors near me, they could be people you grew up with or have done business with.

How Do You Find These Types of Investors?

The best way to find these kinds of investors is to ask. Try an angel investors website or an angel investors network. Also look online. One site to try is Gust, which used to be called Angel Soft. They keep a database of investors, companies, and programs. Startups can search for business plan competitions and more as well.

Gust gives the search for these kinds of investors more organization. But it is not the only way to find angels.

Other Ways to Find These Sorts of Investors

Entrepreneur Magazine suggests angel investors list sites like Funding Post and ACE-NET. They also suggest trying every possible investor because being turned down by 100 investors does not mean the 101st will turn you down. Entrepreneur notes that these kinds of investors will often start small. So, if you can prove your concept to them, and they start to see success, they might add more funding.

Credit Line Hybrid: Know Where You Stand

How do you know whether or not you qualify for any of these options? How do you know if your personal credit score is at least 685 so you can access a credit line hybrid? What indicates your business credit is growing strong because accounts are reporting on-time payments?

The secret is credit monitoring. To be fair, business credit monitoring and personal credit monitoring are two totally different animals. The main difference is that with personal credit, you can monitor it for free. You have the right to one copy of your complete credit report each year. Also, there are numerous free services out there that will give you a peek at your score and some information on your report on an ongoing basis, also for free. All you have to do is answer some identifying questions and you are all set.

Business Credit Monitoring

However, business credit monitoring is not so easy. First, it is never free, really. There are a few ways to get a peek at your business credit for free one time, but that is it. As a general rule you have to pay for business credit monitoring. The question is, how do you get the most bang for your buck.

Just as there are credit reporting agencies for your personal credit score, there are also business credit reporting agencies. The largest one, and the one lenders use most often, is Dun & Bradstreet. However, there are actually several others. The other two most common are Experian and Equifax.

They do not just give out credit reports for free however. In fact, the prices for reports directly from the top 3 most commonly used credit reporting agencies are pretty steep. For example:

Dun & Bradstreet reports range in price from $61 to $229 per report.
Experian reports are $49.95 per report.
Equifax is $99.95 per report.

The prices range so broadly due to the varying complexity and detail of the information provided in each report. For example, Dun & Bradstreet has multiple types of scores and a report for each one.

Or, you can monitor with Experian and D&B both for a fraction of the price.

How to See Your Business Credit for Free

The only real way to get a free copy of your credit report is if you are denied a loan based on your business credit. There are ways to see what is on it, one time, for free however.

Nav

Nav is a service that will let you see a summary of your credit reports from all three of the major credit reporting agencies. However, these are only summaries, not full reports. Generally, that means you can see your score, and maybe the accounts you have listed. While this will help you see where you stand, it will not suffice for the purpose of correcting mistakes or even to show you what you need to do to improve your score. You do have the option to pay for more information though.

Credit.net

Credit.net does not offer ongoing free business credit reports, you can access a free trial. There is no credit card required, and after you pull the report, you have 30 days to check it out. This means at least once you can get a totally free look at your report, because there is no fear of missing a cancelation deadline and having to pay anyway.

Scorely

This is a lesser known credit reporting agency that will let you see your credit report for free before you pay for an ongoing subscription. Unlike Nav or Credit.net, they actually calculate their own score similar to the big 3 (Experian, Equifax, and Dun & Bradstreet.) They strive to be totally transparent and to make their reports easy to understand.

Credit Line Hybrid: What Can a Lender See on Your Business Credit Report?

Each reporting agency offers different types of reports and information, but they all contain the same general data.

Dun & Bradstreet

Dun & Bradstreet offers several different types of business credit reports. In fact, there are six different reporting options in all. They all offer different information related to credit worthiness, and it takes all of them to get the whole picture. The price range listed above is dependent on which reports you want to order.

The report used most often is the PAYDEX. Likely, this is because it is the easiest to understand, due to it being the most like the consumer FICO score. It measures how quickly a customer makes payments and ranges from 1 to 100. A Score of 70 or higher is acceptable. For example, a score of 100 shows payments are made in advance, and a score of 1 indicates that they are 120 days late, or more.

The other Dun & Bradstreet Credit Reports include:

Dun and Bradstreet Delinquency Predictor Score

The delinquency predictor score measures how likely it is that the company will not pay, will be late paying, or will fall into bankruptcy. The scale is 1 to 5, and a 2 is good.

Financial Stress Score

The financial stress score measures pressure on the balance sheet. It shows how likely the company is to shut down within a year. These scores range from 5 to 1, with a score of 2 being “good.”

Supplier Evaluation Risk Rating

This rating ranks the odds of a company surviving 12 months. The minimum score is a 9 and the maximum is 1. A “good” score is 5.

Credit Limit Recommendation

The credit limit recommendation reflects a business’s borrowing capacity. It is a recommendation for how much debt a company can handle. Typically, creditors use this to determine how much credit to extend.

D&B Credit Rating

This one ranks overall business risk on a scale of one to four. A score of 2 is good. The rating is given in conjunction with letters, the combination of which indicate a company’s net worth.

Even if there is not enough information on a business to assign a regular rating, Dun and Bradstreet will assign what they call a Credit Appraisal Score. This is based on the number of employees. Another option is an alternative rating based on what data is actually available.

Experian

Experian uses what it calls Intelliscore as its credit ranking. There are more than 800 different factors that they use to predict a company’s credit risk. With Intelliscore, a score of 76 or higher indicates a low risk of default or late payment. If a score falls between 51 to 75, it indicates a low to medium risk. Scores from 26 to 50 are medium risk, and from 25 down to 1 is medium high to high risk.

Here is where Experian gets tricky. Intelliscore is a blended score of both the business and business owner’s personal information. That means it offers insights into a business’s public record findings, collections, and payment trends, as well as overall business background. Experian is also unique in that it does not ask businesses to self-report. Instead, they collect all the information themselves. You will have to give permission for a lender to view this report, due to it containing personal information.

Equifax

Equifax collects information similar to Dun and Bradstreet, including: information from public records, financial data from the business, and payment history from creditors. Credit utilization is also a factor, which accounts for how much credit you are using versus the amount of credit you have available to use.

The information is used to calculate various scores, including the business credit risk score and the business failure score. The first measures how likely it is that a business will become 90 days or more delinquent on bills over the next year. The score ranges from 101 to 992. The second ranges from 1,000 to 1610 and predicts how likely it is that the business will file for bankruptcy over the next 12-month period. A lower score indicates higher risk.

More About Equifax

They also calculate what they call the business payment index. This is the Equifax version of Dun & Bradstreet’s PAYDEX. It even runs on the same scale of 0 to 100. This is an indicator payment history over the past year. It is different from the PAYDEX, however, in that you must reach a score of 90 or higher for it to be a “good” score.

In addition, Equifax offers business identity reports to confirm a company actually exists. It verifies details such as the company’s tax ID number, number of employees, and yearly sales.

Equifax does not allow business owners to request reports on their own company. They decide themselves when to start a credit file on a specific company.

A Note on CreditSafe

They offer 3 packages: Standard, Plus, and Premier. The problem is, they do not list their prices on their website. You have to request a quote to determine what your pricing would be, as they also allow you to purchase individual products.

They are quickly growing in popularity. No doubt that is partly due to the subscription service it offers, which allows easy insight into your own company’s credit report. The free trial allows for test driving, which sweetens the deal even more.

Their main score, the CreditSafe rating, works on a scale of 1-100. It predicts the likelihood that payment performance will become 90 plus days beyond terms within the next 12 months or that the business will go bankrupt. They offer a variety of other scores and reports that provide a ton of information however.

CreditSafe Business Credit Reports

International Score

This score is derived from the CreditSafe rating. It allows for a comparison of credit risk between companies that are registered in different countries.

Credit Limit

The Creditsafe recommended credit limit uses information from the business payment records and those of similar companies to calculate a dollar amount recommendation of the maximum amount of credit a company should receive at any one time.

Days Beyond Terms (DBT)

Compares how many days late a business pays its bills in comparison to other companies in the industry.

Derogatory Legal

This is a report on the number and value of tax liens and judgements that have been filed in the past 6 years and 9 months. It also includes bankruptcies filed in the last 9 years and 9 months

Payment Trend

A report designed to highlight at a glance substantial changes in how a company is paying its bills.

Business Spend Trend

This one lets you know whether the total annual business spending is going up or down when compared to the previous year.

Subscription packages come in levels, and the prices are dependent completely on your business’s individual needs. You will have to speak to a consultant to get a quote.

Credit Line Hybrid: What if Your Business Credit Score is Bad, or Non-Existent?

If you have never set your business up to build business credit as discussed above, then it is very likely there is no business credit report to check. The steps we gave you to set your business up so a credit line hybrid could help build business credit help separate you from your business. This means that your business accounts report to the business credit reporting agencies, no personal credit reporting agencies.

How can you get accounts in your business name however, without any business credit to begin with? The secret is starter vendors. A lot of business owners do not understand how starter vendors work, or how they help build business credit because what they do does not really seem like credit in the traditional sense.

Specifics

It is not like a credit card account or a charge account. What starter vendors do is they offer invoices with net terms. For example, net30. That means you have to pay the invoice in full within 30 days. They do two helpful things relating to this however. First, they do not check your credit score. There are typically some other criteria you must meet, but bad credit will not keep you from getting accounts with starter vendors.

Next, when you pay those invoices, they will report those payments to one or more business credit reporting agencies. If you get enough starter vendors reporting positive payment history, your score will be strong enough to apply for credit from those credit issuers who will check your business credit score.

How Do I Find Starter Vendors?

They may not advertise themselves as such, but they are out there. It is usually smart to get a little help finding enough to build your business credit score quickly. Here are a few that are easy to get started with.

Strategic Network Solutions

This company sells eBooks, software, and even office supplies. You do have to register to see their products, but the process is fast and easy. You will have to make a $75 or more initial purchase to be eligible for a net30 account of up to $1,000 for a new business. The credit line can increase in increments of $500 if balances are paid in full and on-time. Strategic Network Solutions reports to Experian and Credit Safe.

Grainger Industrial Supply

Granger industrial supply sells industrial equipment for outdoors as well as standard tools, and more. To gain net 30 approval you will need a business license, a DUNS number, and bank reference. They report to Dun & Bradstreet.

Summa Office Supplies

Another office supply provider, you can order anything from paper to staples, pens to printer ink, and pretty much anything you can think of in between from Summa. They require a $75 initial purchase, and will approve up to $2,000 on net 30 terms. They report to Eqifax and D&B.

Quill Office Supplies

Quill also sells standard office supplies. You will need to make an initial purchase. They’ll usually put you on a 90 day prepay schedule, but after ordering for 3 months in a row, they’ll typically approve net 30 terms. They report to Dun & Bradstreet.

Uline

Uline sells a lot of things, but they specialize in packing and shipping equipment and janitorial supplies. You’ll need to place an initial order, and they do ask for a bank reference and two other references. They report to Experian and Dun & Bradstreet, so you’ll of course need a D-U-N-S number too.

Now, a credit line hybrid does require a personal credit score of 685, as mentioned. However, if your business is set up properly, payment can still be reported to business credit reporting agencies, thus building your business credit score even faster.

Get funding to help your business thrive right now.

Credit Line Hybrid and Other Business Funding Options :Tying it All Together

So, which one of these options will be the best one for your business? It depends on a huge number of factors. First, you have to figure out what you qualify for. That means knowing both your personal and business credit score.

Then, you have to determine exactly how much you need, and how fast you need it. That will make a huge difference in the type of lender and the type of product you apply for. Remember, a credit line hybrid will allow you to access a fairly large amount quickly.

If you have the personal credit score, apply for a credit line hybrid now. It is unsecured, no documents required, typically low introductory interest rates, and it works even for brand new businesses. After that, if you still need more funding, you can look at other options such as SBA loans or credit cards.

More Options

If your credit score is not the best, then consider private lenders. At the same time, work with starter vendors to improve and grow your business credit. Once you have your business and personal credit stronger, you can access financing from a variety of sources.

Of course, get your free copy of your personal credit report and monitor your business credit report as well. By knowing what is on each report you can get a handle on what is causing your score to be lower than it needs to be and fix it.

This may mean contesting mistakes. If you do find a mistake, you need to request that it be removed in writing. Send copies of all supporting documents as well. Do not, for any reason, send originals.

Credit Line Hybrid: This Could Be the Answer

The truth of the matter is that there are many options for business funding. However, most business owners do not know about the credit line hybrid. It can be a great option for low introductory rates and building business credit if your personal credit is okay. Even if your personal credit is not so great, you can use a credit partner to help you access this funding option.

Then, you can access the financing you need and build business credit at the same time. You can also combine credit line hybrid funds with any of the other business funding options mentioned to bridge any gaps that may show up for whatever reason. As our global economy continues to change, you can still get funding for your business. Our hybrid credit line could be just what you need to survive and thrive – and come out of the COVID-19 crisis in an even better financial place than before.

The post Credit Line Hybrid: The Top Option for Unsecured Business Financing You Probably Don’t Know About appeared first on Credit Suite.

How The Best Business Line of Credit Can Help You Grow Your Business

A Business Line of Credit is Like Steroids for Your Business

A business line of credit can be an incredible tool for your business. You don’t want just any line of credit however. You want the best business line of credit for your business needs.

Not all businesses are the same, and not all lines of credit are best for all businesses. Different limits, rates, and terms work better for some than others.

What’s a Line of Credit?

If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.

Access is most typically granted through checks or a card connected to the line of credit account.

The Best Business Line of Credit vs. Credit Cards

Business owners often ask what the difference is between a line of credit and a credit card, and why is one better than the other? The truth is that in some cases, a credit card may be the better option. This is a choice to make based on several different factors.

The main difference between the two that most borrowers need to know is that a line of credit typically has a lower consistent interest rate. Also, there are no perks like 0% interest or cash back that you sometimes see with credit cards.

How do I Find the Best Business Line of Credit for my Business?

There are several steps to this process.

1. Consider why you need a credit line.

This is the crux of how you find the best business line of credit for your needs. You have to know your needs. Here are some examples how a business may use a line of credit.

Take advantage of a sale on inventory, raw materials, or supplies. This can reduce cost of goods sold and consequently, increase the bottom line.
Purchase or repair minor equipment when needed. This would be like a new printer or laptop, not an industrial oven, freezer, delivery truck, or a large machine used in a plant of some sort. Larger equipment would best be purchases with an equipment loan.
Bridge temporary cash gaps or continuous, known cash gaps due to timing issues. An example of this would be several bills that are due at the beginning of the month when you know your largest contracts pay at the end of the month. The money is coming, it is reliable, but the bills come due before the money comes. You can pay the bills with the line of credit, then pay off the line of credit when the contracts pay.

2. Find out what is available.

Shop around with various financial institutions to determine which ones offer the best business lines of credit. You will want to look at factors such as interest rate and credit limit in relation to what you need and can afford.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

3. Know your business credit.

Your ability to get approval for the best business line of credit will be directly related to your business credit. While lenders may also consider income and cash flow, they are going to rely most heavily on your business credit score when making an approval decision about a line of credit.

A lower business credit score does not necessarily mean you can’t get approval, but it could greatly affect your interest rate and credit limit.

Consider signing up for a credit monitoring service that lets you keeps tabs on your business credit and what is affecting it each month. The one offered by CreditSuite.com is easy to use and cost effective.

Determining which of these lenders is offers the best business line of credit for your business goes back to knowing what you need, who has it, and who will approve you for it.

When Is a Line of Credit Better than a Credit Card?

If you are going to need to make payments, a line of credit is a better option. There reason is pretty simple. The credit rate is almost always lower. The few exceptions are those cards that offer 0% APR for a short period of time.

If you are going to use a credit card to make regular purchases that you are going to pay off immediately, and you qualify for a card with perks such as cash back, then you may find that you can benefit from using a credit card over a line of credit.

An example would be if you wanted to use your business credit card to make your monthly supplies purchase each month and then pay it off in the following month so that you could take advantage of the cash back.

To float a cash flow gap or make significant purchases that you will need pay out over a short amount of time, a line of credit is almost always the best choice.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

Where To Find the Best Business Line of Credit

Since most small businesses will have a hard time getting approval from a traditional lender due to poor credit or a lack of sufficient credit history, we found examples of what alternative lenders are offering currently.

Kabbage

Kabbage offers a credit line of up to $150,000 with no credit score required. The catch is that the interest rate is between 32 and 108%1 The business must have been in existence for at least one year. And the business must have revenue of at least $50,000.

Due to the extremely high interest rate, this is really only an option for those businesses that cannot get financing. So that would be due to a low or nonexistent credit score. Plus a business would have to need something immediately. Otherwise, when it comes to interest rates, you can do better.

StreetShares

There is a credit line available here of up to $100,000. It is for those who have a business credit score of at least 600. You must have been in business for at least one year. And you must have at least $25,000 in revenue.

It requires weekly repayment.

Due to the lower revenue requirement, this is a good option for smaller businesses that are okay in the credit department.But they might have trouble meeting higher revenue criteria. Also, the interest rate minimum is lower, with the low end at 9%.

OnDeck

If you have a credit score of at least 500 you can get a credit line of up to $100,000 with OnDeck. There is a $20 per month maintenance fee, and weekly repayment. The interest rate is a little higher here than with those requiring a higher credit score minimum. It ranges from 13.99 to 39.99 percent.

Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement.

Lending Club

The credit line on offer from Lending Club goes up to a limit of $300,000. It requires a credit score of 600, at least one year in business, and at least $50,000 in revenue. The repayment term is 25 months. Also, they require collateral for limits over $100,000.

This is a good option for those who meet the requirement. This is because there is a higher limit available with collateral, and the interest rate can go as low as 6.25%. The repayment terms are much friendlier as well.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

You Can Find the Best Business Line of Credit for Your Needs

A business line of credit is a great financing option. It offers flexibility that isn’t always available with a term loan. Interest rates are often better than those offers by business credit cards. And with alternative lenders they are an option for most small businesses. Have you found the best business line of credit for you? We would love to hear about it. Tell your company’s story about when you used the best business line of credit.

The post How The Best Business Line of Credit Can Help You Grow Your Business appeared first on Credit Suite.

The post How The Best Business Line of Credit Can Help You Grow Your Business appeared first on Buy It At A Bargain – Deals And Reviews.

How The Best Business Line of Credit Can Help You Grow Your Business

A Business Line of Credit is Like Steroids for Your Business

A business line of credit can be an incredible tool for your business. You don’t want just any line of credit however. You want the best business line of credit for your business needs.

Not all businesses are the same, and not all lines of credit are best for all businesses. Different limits, rates, and terms work better for some than others.

What’s a Line of Credit?

If you were to pay $1,000, then spend another $500, you would pay on the $1,500 balance the next month. Your payments change as your balance changes. Just like with a credit card.

Access is most typically granted through checks or a card connected to the line of credit account.

The Best Business Line of Credit vs. Credit Cards

How do I Find the Best Business Line of Credit for my Business?

There are several steps to this process.

1. Consider why you need a credit line.

This is the crux of how you find the best business line of credit for your needs. You have to know your needs. Here are some examples how a business may use a line of credit.

Take advantage of a sale on inventory, raw materials, or supplies. This can reduce cost of goods sold and consequently, increase the bottom line.
Purchase or repair minor equipment when needed. This would be like a new printer or laptop, not an industrial oven, freezer, delivery truck, or a large machine used in a plant of some sort. Larger equipment would best be purchases with an equipment loan.
Bridge temporary cash gaps or continuous, known cash gaps due to timing issues. An example of this would be several bills that are due at the beginning of the month when you know your largest contracts pay at the end of the month. The money is coming, it is reliable, but the bills come due before the money comes. You can pay the bills with the line of credit, then pay off the line of credit when the contracts pay.

2. Find out what is available.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

3. Know your business credit.

A lower business credit score does not necessarily mean you can’t get approval, but it could greatly affect your interest rate and credit limit.

Determining which of these lenders is offers the best business line of credit for your business goes back to knowing what you need, who has it, and who will approve you for it.

When Is a Line of Credit Better than a Credit Card?

To float a cash flow gap or make significant purchases that you will need pay out over a short amount of time, a line of credit is almost always the best choice.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

Where To Find the Best Business Line of Credit

Kabbage

StreetShares

It requires weekly repayment.

OnDeck

Again, due to the higher interest rate, this should only be an option if you cannot meet the higher credit score requirement.

Lending Club

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

You Can Find the Best Business Line of Credit for Your Needs

The post How The Best Business Line of Credit Can Help You Grow Your Business appeared first on Credit Suite.

Let Oracle Loans Reveal Your Brilliant Future: A Business Line of Credit or Loan Option for All Your Business Needs

Oracle Has Valuable Financing Options to Fit Virtually Every Situation

In ancient times, an oracle was someone who delivered a divine communication or revelation. Often, these revelations were about the future. However, you don’t need an oracle to tell you your future. You need Oracle Loans to help you make your own.

We have to make our own luck and drive our own destiny. No one can tell you your future. To do that with your business however, you are going to need funding. The problem is, traditional funding doesn’t come easy to everyone.

What do you do then? The answer is non-traditional funding, and Oracle Loans offers just that. They offer a variety of flexible loans and business line of credit options that virtually ensure that business owners from a broad range of income and credit score levels can find something that will work for them.

What is Oracle Loans?

Oracle loans is part of Oracle, which offers a broad range of business solutions including:

Service Management

Financial Management

Human Capital Management

Project Portfolio Management

Advances Procurement

Supply Chain Management

Value Chain Planning

Value Chain Application

The range of services offered under is category is huge, but the financial services are what we focus on here. They offer both loan management for those businesses that offer loans, and financing to borrowers needing small business funding.

What Makes them Different?

The flexible funding offered by Oracle loans is different in a couple of ways. First, there are several options for low credit scores. This means even those businesses that have trouble obtaining financing through traditional means can find success with Oracle.

In fact, some of the loans do not require any minimum time in business or annual revenue. Many do not require any sort of collateral, and some do not even ask for income verification.

The Nitty Gritty Details

There are multiple financing products offered by Oracle loans, so without further ado, here is what you have on the menu.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Unsecured Business Loans

These are the most popular loans offered by Oracle, and they come in four categories: Gold, Silver, Bronze, and Startup.

Gold Level Loans

These loans range from a minimum of $10k to a maximum of $500k. The terms range from 1 to 20 years, and the minimum credit score is 680. They do allow you to have a cosigner if you do not meet the credit score requirement, so no worries there. Typical funding time is 3 to 5 days.

Silver Level Loans

Loans at the silver level range from $5,000 to $250,000. The terms can go up to 20 years, and there is no minimum time in business or monthly revenue requirement, just like on the gold level. Funding is faster at this level, usually happening within 1 to 3 days, but the 680 minimum credit score still stands. Again, if you do not meet this requirement, you can always use a cosigner that does.

Bronze Level Loans

The loans on the bronze level are $500,000. They have terms that go up to 20 years, and the same credit score and cosigner details apply. However, funding can take 5 to 7 days.

Startup Unsecured Loans

The rules are a little different when it comes to unsecured loans at the startup level. The amounts can range from $5,000 to $250,000, and the term lengths and credit score requirements are the same. However, there is a 6-months or more in business requirement as well as a requirement

that monthly revenue be at least $10,000. Funding for these loans takes 1-3 days.

Secured Business Loans and Business Line of Credit

Of course, another option is secured business loans. These are loans that are secured by the borrower with some assets. Oracle offers loans secured by real estate as well as those secured by other assets.

Secured Real Estate Loans- Residential

When you use residential property to secure a business loan through Oracle, you receive up to 80% LTV. The “as-is” value has to be at least $140,000. Loans range from a minimum of $100,000 to a maximum of $15,000,000, and interest rates start at 5.49%. Terms extend up to 30 years.

The really great part for many is that the minimum credit score requirement is only 550, meaning that you can get this loan even if your credit isn’t the best. The one catch is that it cannot be your primary residence that you use as collateral. You must have either an investment home or 2nd home to use as security.

Secured Real Estate Loans-Commercial

If you have commercial property that you can use to secure a loan, Oracle will lend up to 75% LTV. There are similarities with the residential property secured loans, with the as-in value and minimum and maximums being the same. The terms and credit score requirements are the same as well, but the interest rates start at 6.24%, which is slightly higher than the residential property loans.

Other Assets as Security

There are a host of other assets that can used as collateral for a loan or business line of credit. They includes but is not limited to:

Equipment

Machinery

Luxury vehicles

Classic cars

Motorcycles

Yachts

Airplanes

Fine art

Jewelry

Basically, any asset of value that you own can be security for a loan. These are some of the most popular loans because they have some pretty great perks that unsecured loans do not come with. For example, you can make interest only payments if needed. There is also no pre or post payment penalty, and they offer free appraisals on the asset you are using.

Transportation of your asset is insured, and they are stored in high security vaults that are usually within 25 miles of your home.

Secured business loans from Oracle are only available in select states.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

Business Lines of Credit

There are several different options at Oracle for a business line of credit. The most popular is the Stated Income business line of credit. The big draw is that they do not require any sort of income verification and no financial documentation. All industries are eligible for this type of financing, but you must be a legal United States business entity.

The minimum amount is $5,000 and the maximum is $250,000. There is no interest for the first 6 to 24 months, which makes it startup friendly. In fact, this type of financing can help you build business credit. There is a minimum credit score of 680, but if you do not meet that you can get a cosigner that does. The cosigner does not have to have any association with the business.

Stated Income Real Estate Investor Line of Credit

You can also get a business line of credit for investing in real estate with no income verification. It reports to your business credit report so it does not affect your personal credit, meaning you shouldn’t have issues accessing financing for personal needs due to this line of credit.

This line of credit is useful to fix, flip, or hold real estate for income. Amounts range from $10,000 to $250,000 and the interest rate is 0% for the first 6 to 12 months. You can get his type of financing even if this is your first property to flip!

The days in business requirement is only one day. Your credit score has to be 680 or higher, but if you do not meet that a cosigner is fine. There is no collateral required.

Traditional Business Line of Credit

Oracle also offers a more traditional business line of credit. It is available nationwide, and you can have funding in as little as 24 to 48 hours. The minimum amount is $1,000, but the maximum goes to $250,000.

The whole process is fully automated so there is no paperwork, which is a huge bonus. You may be in business for at least 6 months and have at least $50,000 in annual revenue. In addition, there can be no bankruptcy in the past 2 years. You do have to have business bank account however.

If you meet these requirements you can have a traditional business line of credit available to you pretty quickly. There is no origination fee, no minimum credit score, no fee for early repayment, and no application fee.

Invoice Factoring

This is another funding option for an established business that needs cash fast. You can get an immediate advance on outstanding invoices from $10,000 to $2.5 million, and you can have it in as little as a day.

Bridge Loans

Oracle offers bridge loans for investment in residential real estate. They range from $100,000 to $15 million and start at a 6.99% APR. Terms range up to 3 years, and the LTV is 75% or less. The really cool thing is the minimum credit score is 500! They also offer hard money loans with the same terms.

How to Apply for a Business Line of Credit or Loan with Oracle Loans

It is super simple to let Oracle help you see success in your future. Just go to the Oracle Loans website here and click to apply. There is no requirement to enter sensitive financial information online, but you do need to fill out the online form as completely as possible. That is the only way to see the complete list of the Oracle loan and business line of credit options available to you.

Once you have your list, click the loan program you want and start the pre-approval process. You could have an answer as soon as the same day.

Is Oracle Loans Legit?

Non-traditional lenders do not have the best reputation. In fact, some of them turn out to be downright scams. However, Oracle Loans has been in business for 3 years, and they have an A+ rating with the Better Business Bureau. There have been no complaints filed against them with the BBB, and the one review on file offers a rating of 5 stars.

How Business Credit Can Help You Get a Business Lines of Credit

As mentioned earlier, some of these financing option can actually help you build business credit. Also, some of the options only report to business credit agencies, not your personal credit report. What is business credit, and why does it matter?

What is Business Credit?

Business credit is a credit history, including a credit score, for your business only. It is not reflected on your personal credit report, and your personal credit history is not reflected on your business credit.

What does this mean for you and your business? It means that even if you have terrible personal credit, it is still possible to have a good business credit score. It also means that if you run into financing problems with your business, your personal credit will not suffer.

How to Establish Business Credit

It is pretty obvious why business credit is a good thing, but how do you get it started? There is a process. While it isn’t difficult, it does take time, and there are steps that must be taken in order.

The first step is to establish your business as a separate entity from yourself. Here is how that happens:

The very first step is to incorporate your business. This is essential when it comes to establishing your business as separate from yourself. You choose whichever method works best for your business, whether it be an LLC, S-corp, or a full-blown corporation.

After you incorporate your business, apply for an EIN through the IRS. This will be the identifying number for your business, and when you apply for credit, you will use this number instead of your SSN. They may ask for your SSN for identification purposes due to new fraud standards, but it will not be used to check your credit.

Next, set up a business banking account. Run all of your business financial transactions through this account.

Learn more here and get started toward building business credit attached to your company’s EIN and not your SSN.

You also need a separate address and telephone number for your business. The number should be an 800 number, or from some other toll-free exchange.

The next step is to set up a professional website for your business and acquire an email address with the same URL as the website. Do not use a free email service such as Gmail or Yahoo.

Get Established with Dun & Bradstreet

After you complete these steps, the next thing to do is get a DUNS number. This is a number assigned by Dun & Bradstreet. As the largest and most used credit agency, you need to be sure that your on-time payments get reported to them. If you do not have a DUNS number, that will not happen. You can get a DUNS number for free on the Dun & Bradstreet website.

How to Build Business Credit

Once your business has its own identity, you can begin to build business credit. Since in many cases you must have credit to get credit, this can be tricky. The secret to being successful at building business credit is the vendor credit tier.

This is a group of vendors that will offer invoices with net terms, and then report your on-time payments to the business credit agencies. Once you start having payments reported, your credit begins to build. When you have 5 or more vendors from the vendor credit tier reporting, you can start to apply for credit from the next tier, which is the retail credit tier.

The process builds like a snowball. As you gain more accounts at each tier, you can begin to access credit from the next tier. Your business credit will only get stronger and stronger as long as you are making your payments on time.

What are the Other Tiers?

There are 4 credit tiers all together. After the vender credit tier comes the retail credit tier. These are the store cards like Best Buy, Amazon, and Office Depot. After that comes the fleet credit tier which includes those cards that you can use for automobile repair and maintenance as well as fuel costs. Examples of these are Fuelman and WEX. Then comes the coveted cash credit tier. This includes standards we all know such as Visa, AMEX, and Mastercard.

Oracle Loans Can Help You Use Your Business Credit to Create a Bright Future

Oracle has a great mix of products so that you can get financing based on your personal credit if you have not yet established your business credit. However, if you already have business credit, you can use some of Oracle’s financing products to build it even further. This is especially true of their business line of credit products.

You don’t need an oracle to tell you your future, with Oracle Loans, you can make your own future.

The post Let Oracle Loans Reveal Your Brilliant Future: A Business Line of Credit or Loan Option for All Your Business Needs appeared first on Credit Suite.

The Difference Between an Equity Line as well as a Loan

Residence equity fundings are used in different types, consisting of credit limit. Simply put, the
customer might have the selection to think about residence equity finance or credit line. The equity fundings
are supplied in one large amount to the consumer to assist him settle financial debts, minimize high rate of interest on
bank card, settle tuition, renovate his residence to develop equity, etc.

As soon as the debtor accepts the conditions on the finance, the debtor frequently obtains
loan to settle the very first home loan and also extra cost savings to renovate the house, or do what the
debtor meant to do with the cash. On the various other hand, if the debtor is supplied a line of
credit rating for 10 years, at recreation, the consumer can utilize the debt for any type of function meant by the
debtor. The line of credit report enables the consumer to benefit the funding in different ways from the equity
home loan.

It depends upon the loan provider, yet a couple of have limitations on the line of credit, indicating that the
As soon as or else the customer can just take out minimal, consumer can take out the complete quantity at
quantity. As soon as the equilibrium is paid completely, after that the debtor can get even more credit rating to make use of at
recreation; nevertheless, some loan providers state what the cash has to be made use of for, no matter if the
consumer is paying off the financial debt.

The rate of interest on line of credit are Prime Rates that are not based upon a repaired period. Hence, this
presents a hazard to many customers. The residence equity lendings are commonly taken care of price as well as deductibles on
tax obligations might be consisted of. Therefore, to determine which alternative is appropriate for you, you would certainly evaluate out the
distinctions of the problems as well as terms, terms, APR, rate of interest as well as various other pending prices
associated with car loans or credit rating.

The post The Difference Between an Equity Line as well as a Loan appeared first on ROI Credit Builders.