If you have a service business, you have a particular challenge when it comes to getting funding in the form of loans. Namely, you don’t have a lot of physical assets to back your business loans. This means you will often have to resort to high-interest business credit cards or personal credit for funding. We’ll be discussing the best way to get approved for loans for your service business, in today’s article.
Since you don’t have much in the way of assets, you have to greatly improve your profile as a person and company to get approved for low-interest, unsecured, bank-derived business loans. This means you must have immaculate credit and income. Make sure to pull your credit report at least 6 months before seeking any funding in order to give yourself the necessary lead-time to make improvements and corrections to your credit record. Although valid negative items take seven years to come off your report, you can remove incorrect, negative items via disputes. You should make sure that positive items appear throughout your credit report, whenever possible.
In addition to having perfect personal credit, you must also have excellent income history. Also, business credit can help, but this factor doesn’t weigh as heavily as you might think. This is because business credit reporting is voluntary, so it doesn’t really paint a complete picture.
Now, that doesn’t mean merely making enough money from your personal and business income to cover the loan. It also means you have extensive history of positive income with a tendency towards increased income, instead of decreasing income.