Credit Score And Other Factors That Affect Funding
It’s important to be aware of your small business credit score and how you can improve it. However, for new small business owners, there are other factors that influence your ability to get financing and establish credit terms with suppliers.
“Personal credit, revenue, business credit history and profitability all play a role in a lender’s decision to lend a business money,” said Jim Salters, president of The Business Backer. “For newer businesses that have not built a business credit history, personal credit scores tend to have more influence on qualifying for funding. Revenue and profitability can also help show that the business is healthy and complement the owner’s personal credit.”
As your business grows, your business credit score grows in importance as well, according to Salters. “Businesses with high business credit scores typically qualify for more funding options, and more options mean more opportunity to find a product that fits your needs.”
A great business credit score could eventually help you overcome a poor personal credit score, but it would take a proactive effort like “asking suppliers and lenders if they report business credit, and to which bureaus,” Salters said.
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