Merchant Advance Blog

Blog Article: Credit Score for Business Loan Applications

When a small business goes in search of funding, the owners’ credit scores will traditionally be one of the most important benchmarks for loan eligibility. As a business owner, we know you work hard to keep your finances in order and keep everything running above board. But we also know that some situations can cause negative impact on your credit score for business loan applications – and we believe that an apparently “bad” credit score does not necessarily disqualify your business from receiving funding in the form of a merchant advance. To learn about applying for funding, please give us a call or visit the site today for a quote.

Helpful Tips About Credit Scores for Business Loan and Merchant Advance Applicants

  • Don’t enter into a funding application without doing your homework and getting your score in order! First of all, you can check your personal score at Equifax or TransUnion – these services charge a modest fee for each report. Check the reports thoroughly to make sure there are no errors or items of dispute.
  • Don’t forget your business credit score! This is a separate measure that evaluates the creditworthiness of your business as a whole. It is determined based on data gathered from vendors about your payment history, including cash flow, returned cheques, working capital, net worth and financial resources.
  • The metric for grading a business’ credit score differs from that of a personal report. Businesses are ranked on a scale from 0 to 100.
  • A credit report is a recorded moment in time of your personal or business’  financial management, rather than a summation of its complete history. A long period of poor credit can transition to a better score by continuing to hold lines of credit without overspending or “maxing out”, and especially by paying off your bills of all kinds on a prompt and regular basis. This works both ways – be careful not to let your good habits lapse!
  • Don’t write yourself off – show off your best qualities. Merchant Advance Capital was created with the aim of helping practically any small business owner with access to funding. We will look at an applicant’s credit score in the course of our assessment, but we also realize that this is but one of a range of qualitative and quantitative measures that show our underwriters a complete picture of your business’ health and goals. For example, keeping up a good rapport with organizations like the Better Business Bureau, as well as having strong online presence and evidence of consistent customer satisfaction, may inform our underwriters as they decide how best to approach funding your small business.

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