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Credit & Lending

19 Posts authored by: SBC Team

A good business credit score may help your business qualify for better rates on credit cards, loans and lines of credit. So how do you find out what your business credit score is and see what’s on your business credit report? Plus, how do you improve your score if it’s not where you’d like it to be? Check out our infographic.

 

Bank of America Business Advantage

WHAT’S A BUSINESS CREDIT SCORE?

You’re probably familiar with your personal credit score—but did you know your business may have one, too? It also may have its own credit report. A good business credit score and report may help your business qualify for better rates on credit cards, loans and lines of credit.

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Even someone who knows their way around a personal credit score and report may be surprised when it comes to their business.

Here are some of the key differences between personal and business credit.

WHO ISSUES THE SCORE

PERSONAL CREDIT

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Just 3 agencies issue scores: Experian, Equifax and TransUnion.

BUSINESS CREDIT

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Scores come from a variety of vendors who collect data about your business and create reports. Three of the largest are Experian, Dun & Bradstreet and LexisNexis.

THE NUMBER

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300 to 850. All 3 agencies use the same scale.

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Variable, depending on the issuer. For example, Dun & Bradstreet PAYDEX scores range from 1 to 100; LexisNexis scores fall between 222 and 900.

WHAT'S IN THE REPORT

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Personal credit information, including history with creditors such as mortgage lenders, auto finance companies and credit cards.

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Business credit information,including payment history with creditors such as trade finance providers, history of business credit cards and lines of credit.

STANDARDIZATION

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All 3 reports will look similar, with minor variances.

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There’s no standardization, so a report from one vendor may include information about a certain vendor or creditor that another does not.

While your personal and business scores are different, your personal score can affect your business score. So keep an eye on it.

WANT TO IMPROVE YOUR BUSINESS SCORE?

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Pay all bills on time.

This is one of the most important factors when it comes to your credit score.

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Maintain positive cash flow.

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Reduce debt.

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Review your scores periodically and update your business profile.

This includes reporting business income.

To find out more, please visit a financial center or speak with your banker.

 

 

 

Click here to download a PDF version of this infographic.

SBC Team

Why you got declined

Posted by SBC Team Apr 9, 2018

Getting denied for business credit is frustrating, but knowing why you were turned down can help improve your chances next time. From your cash flow to your utilization ratio, this infographic breaks down the common reasons small businesses are turned down and explains steps to take before reapplying.

 

Bank of America Business Advantage

BUSINESS CREDIT:
IF YOU GET DECLINED

When a bank considers your application for business credit, they take a close look at your history with creditors and billers—as well as reviewing your company’s financials. These are some of the reasons applications are declined.

YOUR CREDIT

REASON FOR DECLINE 02-mini-icon-x.png
Your payment history is unsatisfactory.

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Your personal or business credit report shows a pattern of late or missed payments.

WHAT YOU CAN DO 02-mini-icon-star.png
Always pay on time. It can take years for blemishes to fall off your report completely, but consistent, on-time payments will help.

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REASON FOR DECLINE 02-mini-icon-x.png
You have a lack of established revolving credit.

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Your credit report doesn’t show a long history with credit cards or other creditors.

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Time is one of the most important factors in your credit history. The longer you can show a pattern of on-time payments, the better. Applying for a secured credit card is one way to build your history.

REASON FOR DECLINE 02-mini-icon-x.png
You’re using too much of your credit.

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Lenders dislike when you’re using all—or even most—of the credit that’s available to you.

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If you can, keep your utilization ratio—the percentage of credit you’re using vs. total available credit—as low as you can.

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REASON FOR DECLINE 02-mini-icon-x.png
You’ve filed for bankruptcy.

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A past personal or business bankruptcy may affect your chances of securing new credit.

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In the coming months and years, work to improve cash flow, boost revenue, cut expenses and improve your credit score. You can also look into a Community Development Financial Institution (CDFI) loan, which may have different requirements.

YOUR BUSINESS

REASON FOR DECLINE 02-mini-icon-x.png
Your business has insufficient revenue.

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The lender is concerned that your revenue can’t support increased credit.

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Consider a smaller amount or a collateral-backed loan or credit line.

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REASON FOR DECLINE 02-mini-icon-x.png
Your business doesn’t qualify.

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Not every service or business is eligible. For instance, to qualify for certain credit products, Bank of America requires your business to be under current ownership for at least two years. And some products have minimum revenue requirements.

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If your business hasn’t been around long enough, try again when it has. Or consider a CDFI loan, which may have different requirements.

REASON FOR DECLINE 02-mini-icon-x.png
Your business has insufficient cash flow coverage.

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The lender thinks you don’t have enough cash flow to make payments on new debt.

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Consider a smaller amount or a collateral-backed loan or credit line.

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YOUR BANKING RELATIONSHIP

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You have sufficient credit with your bank already.

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Even if you have great qualifications, a bank may not want to exceed a certain amount of credit exposure.

WHAT YOU CAN DO 02-mini-icon-star.png
If you have unused credit lines, close them. If not, you may need to consider other sources.

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ADMINISTRATIVE REASONS

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REASON FOR DECLINE 02-mini-icon-x.png
It’s a duplicate application.

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If you’ve applied for the same product within the last 90 days, it’s considered a single application.

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Wait it out.

Getting turned down for business credit is frustrating, but knowing why it happened can help improve your chances next time.

To discuss your needs and find the solutions that work best for your business, please contact a small business banker.

 

 

 

Click here to download a PDF version of this infographic.

If getting credit for your small business is proving to be an uphill climb, you may want to look into a secured credit card. Not only can it help you build or reestablish the credit you need now, but also possibly provide a stepping stone toward an unsecured credit card or bank loan in the future.

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Click here to download a PDF of this infographic.

How to repair business credit When it comes to your small business, better credit could mean bigger possibilities. Improving your company’s credit score — and in some cases, repairing it — could help you take full advantage of opportunities that may fuel your business growth.

 

Learn the ins and outs of building a solid foundation of good business credit with our new guide.

 

Click here to download the guide "Eight Ways to Maintain and Repair Good Business Credit" (PDF).

Now that you’ve gotten familiar with the loan choices the SBA offers with, you may be ready to apply. Here, we give you a step-by-step checklist of everything you need to do to complete and present the necessary paperwork and cover all your bases.

 

You can also read Part 1: "An Overview of  SBA Loans" here and Part 2: "Types of SBA Loans" here.

 

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Click here to download a PDF version of this infographic.

Need a loan? Consider one from the Small Business Administration. In our three-part series, you can explore all your SBA options to make a more informed decision and get the loan that fits your business needs best.

 

SBA-Loans-Overview-Thumb.gifPart 1 provides an overview of what SBA loans are and how they can benefit your business. You can read about the different types of SBA loans in Part 2 by clicking here.

 

Click here to download the SBA Loans Overview guide (PDF).

There are several types of loans available from the Small Business Administration. In part 2 of our 3 part series, discover all the loan choices at your fingertips, so you can do your due diligence and select the one that’s perfect for your business.  You can also read Part 1: "An Overview of  SBA Loans" by clicking here.

 

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Click here to download a PDF version of this infographic.

 


 

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Watch the video below to see a brief comparison of the different lending products and features, to help you understand how credit options can support every stage of your business journey.

 

SBC Team

The 5 Cs of Business Credit

Posted by SBC Team Jul 12, 2016

When it comes time to secure financing for your small business, it’s important to know going in what lenders are looking for. And while it’s true that many lenders have their own unique underwriting requirements, most follow “The 5 Cs.”

 

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Click here to download a PDF of this content.

Better credit means bigger possibilities. Improving your company’s credit score can help you take full advantage of the opportunities that arise as your business grows.  Learn the ins and outs of building a solid foundation of good credit history with our infographic, Building Credit for Your Small Business.

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Click here to download a PDF version of this infographic.

Choosing_the_right_CreditCard_Infographic_Thumbnail.jpgGive your business some credit. When it comes to credit cards, the right choice can make a big difference, and can play a very important part of the successful growth of any small business. Understanding the different features, benefits and trade-offs of all the options available is key. Our new infographic will help you get started.


Click here to view the Best Credit Card for Your Business infographic.


Buy_or_Rent_Thumb.gifTo buy or to rent? That is the question. At some point in the life of nearly all businesses, owners eventually face this simple, yet complex, question.

 

Our buy or rent guide will give you an overview of factors to consider when deciding how to acquire property for your business.

 

Click here to download our guide "Buy or Rent: Securing property for your business."


SBC Team

Small Business Lending Guide

Posted by SBC Team Dec 12, 2013

Lending_GuideThumb.jpgMore and more banks are loosening up and lending again. And as a small business owner, you are constantly under pressure to make sure your business has the financial backing it needs. This new guide will provide a refresher of the most traditional and creative financing options available.


Click here to download our Small Business Lending Guide: An Overview of the Different Types of Lending Options Available for Small Businesses


The-Right-Financing-Thumbnail.jpgVirtually all businesses need access to capital beyond the cash flow generated by continuing operations at different points throughout their lifecycle. The range of financing alternatives is expansive: personal savings, family and friends, grants, loans, lines of credit, credit cards, supplier credit, crowd funding, angel investors, venture capital, and more. Following is a general depiction of the stages of business growth, financial benchmarks typically associated with them, and potential financing sources for each.

 

Click here to view our infographic titled "The Right Financing at the Right Time".

Infographic_Thumb.gifBack in business: banks are lending again. The recent upswing in the economy is great news for small business owners.

 

From start-up funds to investors, loans and credit cards, you need to be familiar with the current lending landscape. Our infographic will give you a great overview of benefits and key considerations when making a lending decision for your business.

 

Click here to view our infographic about the current Small Business Lending Landscape


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