2013년 11월 26일 화요일

About 'small business loan lenders'|Guest Post-Small Business Loans Require You to Have Good Credit







About 'small business loan lenders'|Guest Post-Small Business Loans Require You to Have Good Credit








Small               business               credit               and               personal               credit               are               often               the               same               thing               in               the               early               days               of               a               business.

As               the               business               grows               and               matures,               these               two               credit               entities               should               diverge.

Ideally,               the               personal               credit               of               the               owner               should               become               unimportant               to               the               credit               worthiness               of               the               business.

No               one               checks               the               shareholders               credit               score               for               large               companies.

If               the               business               has               its               own               tax               identification,               address,               and               is               incorporated,               it               should               be               able               to               stand               or               fall               on               its               own               credit               rating.

Getting               to               this               point               is               another               matter.

Learn               not               to               mingle               personal               and               business               funds.
               The               first               step               to               establishing               credit               is               to               build               a               paper               trail               of               the               income               and               expenses               of               the               company.

This               means               that               separate               accounts               must               be               established               for               checking               and               possibly               savings.

Money               that               comes               into               the               business               must               be               treated               as               if               it               belongs               to               someone               else               for               accounting               purposes.

This               will               provide               potential               lenders               with               a               way               to               judge               the               profitability               of               the               business.

By               not               adding               personal               funds               to               the               business               to               keep               it               floating,               the               owner               will               also               be               able               to               know               whether               the               business               is               actually               making               money.
               Resist               the               urge               to               take               extra               cash               from               the               business               for               personal               whims.
               Owners               of               small               businesses               must               learn               to               pay               themselves               a               reasonable               salary               and               resist               the               temptation               to               take               extra               cash               from               the               business.

When               a               business               applies               for               credit,               the               lender               will               look               for               a               consistent               positive               cash               flow.

When               the               owner's               lifestyle               is               an               obvious               drag               on               the               company's               profitability,               lenders               are               not               going               to               be               willing               to               loan               to               the               business               without               the               owner               having               to               assume               some               personal               risk.

On               the               other               hand,               a               business               with               a               strong               cash               flow               and               a               steady               gain               in               funds               available               will               be               viewed               as               a               good               risk.
               Keep               good               records.
               Many               small               business               owners               become               so               busy               running               the               shop               that               they               neglect               the               bookkeeping.

It               is               hard               to               convince               others               that               you               deserve               credit               if               they               cannot               tell               what               is               going               on               financially.

You               need               to               be               able               to               provide               a               decent               statement               of               income               and               expenses               along               with               a               balance               sheet.

Over               time,               these               accumulated               records               along               with               your               banking               history               will               grow.

These               documents               can               then               provide               lenders               with               a               good               picture               of               how               your               business               is               doing               financially.
               Establish               accounts               with               local               vendors.
               Most               local               businesses               are               willing               to               extend               at               least               limited               credit               to               new               customers.

As               you               purchase               items               and               pay               on               time,               these               credit               limits               can               be               increased.

These               should               become               accounts               that               grow               all               month               with               the               balances               paid               in               full               by               the               due               date.

It               is               not               exactly               the               same               as               establishing               a               long-term               loan,               but               it               will               go               far               toward               proving               that               you               and               your               company               are               able               to               pay               your               bills.

Often,               these               companies               will               not               report               to               credit               bureaus,               but               they               will               give               a               credit               reference               that               will               help               with               future               borrowing.
               Get               a               company               credit               card               without               your               name               on               the               front.
               The               credit               card               issuer               may               list               you               as               a               primary               contact,               but               the               company               will               be               the               card               owner.

In               this               way,               your               credit               history               with               the               card               company               will               be               reported               to               credit               bureaus.

The               company               will               begin               establishing               another               way               of               proving               its               ability               to               responsibly               handle               credit.

Keep               these               balances               relatively               small               and               pay               them               off               as               often               as               possible.
               Buy               some               land               for               future               growth.
               Compared               to               buildings,               land               is               generally               cheaper               and               more               secure.

If               you               choose               a               good               location,               the               property               should               grow               in               value.

It               will               not               require               a               huge               sum               of               money               to               purchase               it.

The               lender               will               know               that               it               is               a               secure               risk               for               them               as               long               as               you               can               offer               a               significant               down               payment.

It               should               be               at               least               20               to               30               percent.

Even               if               you               can               afford               to               pay               cash,               it               is               a               good               idea               to               finance               a               portion               to               continue               to               build               the               company's               credit.
               Keep               a               good               cash               balance.
               Banks               and               other               lenders               like               cash.

Having               enough               cash               on               hand               to               cover               several               months               of               operating               costs               tells               the               bank               that               the               company               does               not               have               impending               money               woes.

While               the               business               may               not               always               have               a               large               cash               balance,               try               to               keep               it               as               big               as               possible               without               stunting               the               growth               of               the               company.






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