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The first place to start when it comes to finding a bank loan or credit is not with your banker, accountant or lawyer but with you! In the case of most small businesses, the business is the owner so your credit history is important in getting a loan.
How good or bad your personal credit history is can influence the bank in lending you money.
In the wake of all these big corporate bankruptcies, banks are carefully reviewing all lending practices and trying to mitigate the risks. Before you go into a financial institution for a loan, know your credit history. If you can explain a late payment and know why it is on your credit file then offer your bank a reasonable explanation.
Check your credit history from the big three credit bureaus for missing data, mistakes and omissions. For example, you may have cancelled a $2,000 credit card limit years ago but it can still be on file. The bank will view this as available credit and limited your loan size.
Ordering your personal credit history report from the 3 main credit companies (Equifax, Experian and TransUnion) ranges in price from free to $12.95. Or order a triplicate report from one of the companies. You also have the option to order by phone, mail or online.
So remember the first step to getting the cash you need for your small business is to have a clean credit report.
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