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t is reported that one third of applications get denied for credit for their business. If you are a part of the one third, here are some ways to help with this challenge your business face. First, try to determine where the problem is. This can be done by looking at some common areas that could be of concern:
Business profits
Improving your profits by reducing and trimming operational excess and unnecessary business spending can help improve profits. This will boost your chances of approval.
Business assets and liabilities
If your balance sheet is in the negative, most lenders will run the other way. If your business is already heavy on debt, then this will be an area of concern you should address.
Payment histories and business credit profile
How you pay existing obligations will play a role in your approval or denial for credit. If you have gotten a business credit denial recently, check your business credit score and payment history.
Most payment information is only reported for 2 to 3 years (depending on the credit bureau), so if you do not have a good payment history make sure to make your payments on time moving forward. Keep the positive payment history going, and make sure what is being reported is accurate.
Bank ratings
If your business bank account balances are often low, this can rule you out for certain types of business credit. Try to kept some funds in your business bank accounts.
The bottom line, if you have had a credit denial, then there is something about your business making it seem to be a high risk to lenders.
Take the time to analyze and understand your business credit report and business finances.
Find where the problem is and take the necessary steps to correct the problems.
Sometimes a lack of history or data on your business is a key factor in a credit denial.
You can fix this with careful steps to shape your business’s financial picture and credit profile.
Join my group here. It is filled with resources and support for entrepreneurs to build their business credit! See what it’s about, here’s the link:
https://www.facebook.com/groups/businesscreditmasterycircle
I will see you on the inside!
About the Author
Kimberly Lewis is currently the CEO of EPC Solutions LLC. She specializes in helping business owners establish excellent business credit scores and then leveraging those scores to access credit and cash for their businesses. For more information on business credit scores, business credit and business loans visit https://epc-solutions.net.