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    2 Replies Latest reply on Mar 23, 2008 2:23 AM by TJMorehead

    Does personal credit affect getting a business loan???

    UltrasoundMom Newbie
      I am looking to open a francise based on a company that is SBA approved and has 11 other francisees thought the US. I am just interested to know how much personal credit will affect me when I go to applying for a small business loan if I can show them that the business is SBA approved and if I have a well put together business plan.
        • Re: Does personal credit affect getting a business loan???
          LUCKIEST Guide

           

          .Does your personal credit affect your chances of
          getting a business loan ? Good question

           


          All lenders, especially banks, will do a thorough check of
          your personal credit history.
          It most likely will affect your chances
          of receiving or being declined for a business loan.
          • Show a steady source of income.
          • Credit card balances should be paid off or carried at low amount.
          • Obtain credit reports from all credit bureaus to check for
          accuracy.

           


          Lenders want to be assured the person they are loaning funds to is
          capable of managing personal finances.
          Always be honest with lenders about your
          personal credit history. Finally, financial needs need to be
          organized
          with key documents, a business plan, financial statements and a
          repayment plan.

           

          In order to get a business loan, a business owner must think like a
          bank.
          Business loans are somewhat different than personal loans;
          in addition to having a good credit standing,
          usually banks and
          financial institutions require business owners to supply a well thought
          out business plan.
          Banks want to be assured that the business owner
          will repay the loan.
          In addition to a well-thought out business plan, a business owner
          will most likely find that most institutions require personal financial
          information as well. Be prepared to present the lender with personal
          financial statements,
          and personal tax returns.

           

          It is the business owner’s responsibility to ensure the
          lender that the business is of little risk,
          because after all, they are
          in a business for profit as well.

           

          Good luck, LUCKIEST

          • Re: Does personal credit affect getting a business loan???
            TJMorehead Adventurer
            Hello UltrasoundMom,

            If you franchise is approved that serves as an advantage for you with the SBA. If you don't have business credit, then yes some lenders refer to your personal credit. You can however, build business credit if you can wait to apply for financing in about 8 months.

            We offer a business credit builder program, that helps establish business credit without having to use your personal credit. Email me for more details and take a peak at my blog page- www.moreheadsconnections.blogspot.com.

            Warm regards,
            TJ Morehead