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Does it ever feel like no one wants to give you credit when you really need it. But when your personal finances are going well, you are getting offers left and right? Welcome to the reality of getting business credit, and I will tell you right now it is much harder to obtain than personal credit. Even though it can be frustrating to deal with lenders while you are attempting to obtain business credit, you have to understand their position. They have seen too many businesses fail so they have to be very selective of who they extend it to. Most business loans aren't small, so that is a significant amount of money the lender loses if they don't repay it on time. Even though they can sell the business to make up for it, this is a process that takes time. When you approach a lender for money for your new business you have to prove that you have a good chance if it making a profit. The fact that you have lived in the community your entire life or that you have excellent personal credit just isn't enough. Take your time to do enough research that you can cover all the angles of the proposed business in a plan you can present to the lender. This lets them know you are very serious about your efforts Therefore, it is quite refreshing when a potential business owner approaches them with a well thought out plan. You should have a very detailed business plan that goes over all the information. Provide the lender with a copy of it so they can refer back to it as they need to during the lending process. Have someone else check it over for spelling and grammar mistakes. You want it to be as professional as possible. However, your business plan also needs to offer some insight as to why you want to own your own business. Don't be afraid to add a few pages that talks about your skills and experiences you can use to operate the business. Let your passion for the type of business you want to operate shine through as well. Your business plan is the most powerful tool you have to convince a lender to give you a chance so make it a top priority While business loans often have higher interest rates than personal loans you still want to keep them separate. I can't stress to you enough just how important that is. Remember how difficult it was to establish your personal credit and protect it at all costs. Don't fool yourself into thinking that you don't need business credit because you do. Fight very hard to establish business credit that doesn't have any link to your personal finances. Too many people have ended up losing everything they have worked their entire lives for because of this link factor. While you want your business to be a success, there is no crystal ball to look into and see what the future holds. As much as you want to establish business credit though you do need to be careful. There are plenty of scams out there in this area because they know people are depending on it to fulfill their dream of owning their own business. Try to work with lenders in your area that have a solid reputation. If you are working with an online business or one you haven't heard of before, make sure you check them out. They may be legitimate. Or they may be one more business credit scam, that has decided to move in and take advantage of hard working individuals like yourself trying to establish credit for their business
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Robert Bain writes about how to build corporate credit the smart way, and avoid the common small business credit disasters.
