According to recent reports only two thirds of applications for business loans are approved
The first thing you need to do is to determine where the problem lies. There are several areas of potential concern to consider. Does your business have a profit margin? Improving your profits by reducing and trimming down the operational excess and unnecessary business spending can help improve profits and boost your chances of getting approved.
Most lenders will deny credit quickly if your balance sheet is out of whack. If your business is already debt ridden then this will be an area of concern that you will want to address as soon as possible.
How you are paying your existing obligations will play a role in your approval or denial for credit. If you've been denied business credit recently, check your Paydex and other payment performance data and make adjustments as necessary. Most payment experience data is only reported for 2 to 3 years so if you've made a mistake don't let it worry you. Just keep the positive payment history building and make sure what is being reported to date is accurate.
Also, you need to recognize that if your business bank account balances are continually low, this might possibly rule out your qualifying for certain types of business credit. To avoid this situation you should maintain at least $10,000 in your business bank accounts, if possible.
Here's the bottom line: If your business has been denied credit there is something that makes it appear to be a bad risk.
Your job is to analyze your business credit report and understand your business finances so you can determine what action needs to be taken to correct your course.
It could be that the lack of history or data for your business that has been reported will be a key factor in credit denial.
This is something that should be easily corrected by taking diligent steps to shape your business's finances and credit profile as outlined above.
The first thing you need to do is to determine where the problem lies. There are several areas of potential concern to consider. Does your business have a profit margin? Improving your profits by reducing and trimming down the operational excess and unnecessary business spending can help improve profits and boost your chances of getting approved.
Most lenders will deny credit quickly if your balance sheet is out of whack. If your business is already debt ridden then this will be an area of concern that you will want to address as soon as possible.
How you are paying your existing obligations will play a role in your approval or denial for credit. If you've been denied business credit recently, check your Paydex and other payment performance data and make adjustments as necessary. Most payment experience data is only reported for 2 to 3 years so if you've made a mistake don't let it worry you. Just keep the positive payment history building and make sure what is being reported to date is accurate.
Also, you need to recognize that if your business bank account balances are continually low, this might possibly rule out your qualifying for certain types of business credit. To avoid this situation you should maintain at least $10,000 in your business bank accounts, if possible.
Here's the bottom line: If your business has been denied credit there is something that makes it appear to be a bad risk.
Your job is to analyze your business credit report and understand your business finances so you can determine what action needs to be taken to correct your course.
It could be that the lack of history or data for your business that has been reported will be a key factor in credit denial.
This is something that should be easily corrected by taking diligent steps to shape your business's finances and credit profile as outlined above.
About the Author:
Michael Sacks is a recognized expert with nearly thirty experience in banking and financial services. Through his company's website you can learn more about establishing business credit and obtaining funds for your business. You can also request a complimentary e-book and learn how to avoid the nine devastating finance mistakes business owners make.
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