According to recent reports only two thirds of applications for business loans are approved
The first thing you need to do is try to determine where the problem is. There are several several areas of possible 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.
If your balance sheet is out of whack, most lenders will automatically deny credit. If your business is already heavily in debt then this will be an area of concern that you will want want to address.
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.
To improve this situation you must analyze and understand your business credit report and business finances. This will enable you to take the necessary steps to identify the problem and take corrective action.
Sometimes the lack of history or data on your business 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 try to determine where the problem is. There are several several areas of possible 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.
If your balance sheet is out of whack, most lenders will automatically deny credit. If your business is already heavily in debt then this will be an area of concern that you will want want to address.
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.
To improve this situation you must analyze and understand your business credit report and business finances. This will enable you to take the necessary steps to identify the problem and take corrective action.
Sometimes the lack of history or data on your business 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 financial services and banking. 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 9 devastating finance mistakes entrepreneurs make.. Also published at What To Do When Your Business Is Denied Credit.
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