Business Credit Score Factors

Business Credit Score Factors

If you’re a business owner seeking a business loan with credit issues, even if your company is well run and bringing in consistent revenue.  Many banks & lenders will deny you if their strict requirements are not met. Low credit can stop you from getting the funds you are seeking.   Business credit score represents how much money you can borrow based on your company’s financial History.  Like your personal credit is connected to an individual’s Social Security number, business credit is linked separately through an Employer Identification Number (EIN – also called Tax ID Number).
As a business owner, you want to maintain both a strong personal credit history and a strong credit profile for your business. When your business has a good credit profile, you have a better chance of securing financing when you need it. A better credit score means better financing terms, means you pay lower interest rates. This can lead to cheaper insurance and utilities.  Also when your suppliers see a high credit score, they’re more likely to extend credit.  It all adds up to more capital, better cash flow and a healthier business.

Structuring Your Business for Growth

If you are currently a DBA sole proprietor company using your social security number and personal credit for your business.  To take the next step up the financial ladder, you want to open a business account separate from your personal checking and get your EIN#.
  • Opening a business account at a commercial bank like BOA, Chase, Citi, Wells Fargo, can pay upwards of $50 per month in service charges.
  • To save money suggest opening a business checking account at a local credit union due to little or no monthly service charges.
  • You can apply for an EIN in various ways, the easiest is applying online for online at

Spend Less

Another money saving idea not directly tied to your business credit score, but related to your company profile.
  • Small businesses that are incorporated as a C-Corp or S-Corp (Inc.), pay double in accounting fees for separate personal and business tax returns.
  • Companies incorporated as a Limited Liability Corporation (LLC), file their personal and business finances on one tax return.
  • INC accounting fees upwards to $2000 per year contrary to LLC accounting costs around $500 yearly. By switching the savings can really add up over time.
  • The main difference – INC companies can take tax deductions for up to 15 years, where LLC companies have only seven years to write off losses.

Credit Reporting Agencies

The four major business credit scoring bureaus are Equifax, Experian and Dun and Bradstreet, each uses a slightly different scoring method. Regardless of which method used, a business can have a good credit score if it pays its bills on time, stays out of legal trouble and keeps debt to a minimum.
Factors that go into the calculation include:
  • Years in business
  • Lines of credit you’ve applied for in the last nine months
  • New lines of credit you’ve opened in the last six months
  • Collections amounts in the last seven years
  • Payment history in the last 12 months
  • Lines of credit in use in the last six months
  • Percentage of available credit used
  • Number of payments one to 30 days late, or 31 days or more late
  • Number of non-net-30 lines of credit (meaning that the payment is due in less or more than 30 days)
The best way to take advantage of a business loan if you have bad credit is to have a strong business plan with clear goals. You should check your credit report at least once a year, to keep track of the progress you are making. You should also be making every effort to repair your bad credit, which can include paying your bills on time, cutting costs and reducing credit card usage.  It can take many months to fix a damaged credit score, but actively taking steps toward improvement will benefit you personally, your family, and your business in the long-run.

Traditional lenders make it difficult

Working capital loans can enable your business to get the funding when and where you need it most. Traditional lenders require good credit, want to review your resume, a detailed business plan, two years of financial paperwork, collateral, plus they want a detailed plan how the funds are going to be used. The application typically takes 40+ hours to complete. If you are approved it can be a month or longer before you get the capital you need. Rejection rates have been roughly above 80% over the past several years with on SBA loans. If you have any issues the application is denied.

Capital without the hassle

We provide a business friendly alternative to traditional bank loans for establish businesses.  Our simple method allows us to be flexible on credit history checks and avoid the unlimited documents connected to your approval. Funding from $5000 to $500,000. Rate and term is dependent on the performance of the business. The amount capital that can be borrowed is dependent on the monthly deposits. There is very little paperwork involved this is the main reason why the application process is so quick.