June 21, 2011
Securing Your Startup
Top women business owners know being in good financial standing is the difference between a company that sinks or swims. Since the number of loans granted by banks to small businesses has fallen by 69 percent in just a few years, there’s more competition than ever when it comes to attracting lenders for startups.
How can you gain an edge over the competition? Good credit.
“Lenders consider a variety of factors when evaluating your business credit, including your personal and business payment and credit history,” Rosa Alfonso of American Express Open tells PINK.
Before applying for credit, she advises registering your business, keeping licenses current and not applying for too much. Once you secure credit, Alfonso says take on only debt that helps drive revenues and effectively manages cash flow.
Finance experts recommend separating business credit from personal, which you can do by obtaining a tax ID number from the IRS. A well-written business plan and having all the necessary permits in place can help establish a positive credit profile. Working with suppliers who note your on-time payments and reporting transactions to the credit bureaus once you start buying for your business will also help.
Biz2Credit offers the BizAnalyzer Report to determine whether your business is considered risky by lenders. Plus, AllBusiness lists programs that calculate which loan or investing offer fits your company.
Bonus PINK Link: Now that you’ve got your business’ credit in line, find out how to manage your personal credit in our online exclusive.
By Brittani Banks
"The door of opportunity is wide open if you are prepared." Unknown