Bad Credit Can Hurt Your Business

Starting out many small businesses look toward external funding sources to help them get their started. This startup capital is often used for equipment, rent, insurance, payroll and initial inventory – depending on the type of business it is.

Sources of funding can include personal savings, friends and family, banks, venture capitalists, credit card advances or lending institutions. When looking for sources of capital, many small business owners are unaware of how their personal credit ratings affect their likelihood to obtain funding or business credit cards.

Since a new business has no credit history of its own lending institutions look at the owner's personal credit history for any risk. The level of an owner's risk not only determines the likelihood of obtaining funding, the owner's credit history also has a direct impact on the interest rates applied to the loan or business credit card.

A new business owner with a history of bad credit can typically expect to pay more interest on loans and credit cards than a business owner with a good credit history.

Improving a business owners bad credit by doing credit repair is a very important step in business planning. Credit repair can be a complicated process and it is recommend an owner seek assistance from a reputable credit repair professional or company.

Credit repair is not an overnight process. It takes some time and discipline. However, serious business owners understand that bad credit can keep them from starting a business of their own.

A personal experience: I worked for a small business owner who had never run his business or personal life financially repsonsibly. When it came time to move the business and look into upgrading the phone system this business owner could not qualify for a line of credit to do so. The move became more expensive because he had to rely on credit cards and on a overdraft loan, both with high interest rates. Don't let this happen to you.

Resources:

Credit Repair by NOLO

How to Repair Your Credit Score Now: Simple No Cost Methods You Can Put to Use Today

American Credit Repair: Everything U Need to Know About Raising Your Credit Score (American Real Estate)

Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future, 2nd Edition

Your Credit Score, Your Money & What's at Stake (Updated Edition): How to Improve the 3-Digit Number that Shapes Your Financial Future

I have not included any credit repair companies because there are a number of reviews which have pointed out that there are few, if any, reputable companies (or affordable). So, it seemed to me that the best choice was to point you toward DIY (Do It Yourself) books. At least you aren't going to be out thousands of dollars with one of these. Best of Luck to You!

If this website helped you find your financial future we ask you to please give as a way to say Thank You. Not only does it support this site, is is a way to give it forward so others may find their way toward financial security. Please consider giving today. Thank You.

top of page