If you’ve been in business at least a year, it’s time to take out a small loan to pay for some services or perhaps some new equipment… whether you need it or not.
Remember, building your business’s credit history is crucial. It doesn’t matter whether you spend the money or just open a savings account and keep it there – that’s up to you. Once you secure the loan, ask for 90 day terms. Repay the loan, in full, in 60 days. Wait a month. Apply for another loan for a slightly larger amount and again, ask for 90 day terms and repay the loan in 60 days.
You have now proven that you can be trusted to borrow and repay loans on time. When it comes to good business credit, there is what’s known as the “5-3-2 rule.” The recipe to establish a solid business credit record is to have:
- 5 active trade accounts
- 3 business credit cards
- 2 small loans paid in full
You should also know that every commercial lending application you submit appears on your credit record – even if you were turned down. The bad news is that if you’ve been turned down by one lender, the next potential lender will see that you were already declined, thereby reducing your chances of getting your loan funded. So it’s critical to make sure you do it right the first time.
That’s where IOU Financial comes in. We consider more than your credit rating, such as your daily cash flow, your businesses success track record, even your location and what kind of business you are, making it easier to get approved and get started building your credit rating.
Okay, so now you know that taking out a small business loan is a solid decision, but it’s complicated and time consuming to go down to the bank and bring all your paperwork, right? Once again, that’s where IOU Financial comes in.
You can apply online whenever it’s convenient for you. Even start a loan application and save your progress so you can finish it later. You’ll get an instant pre-approval and have your working capital in just a few days. It doesn’t have to be complicated – at IOU Financial, we believe in less paper, less people, and more technology. Click the link below and get started right now.
Sources: Source: Dun & Bradstreet Credibility Corp. http://smallbusiness.dnb.com/banking-finance/banking-lending-credit-services-commercial/12326185-1.html and http://smallbusiness.yahoo.com/r-article-a-2014-m-1-sc-10-business_loans_buyers_guide-i