As you may have heard, almost 90% of all small businesses do not survive the first two years of operation, according to the Small Business Administration (SBA). Lack of financial resources is one of the reasons of this failure.
Business credit is also referred to as commercial credit. Today, online lending platforms are increasingly becoming a preferred choice for many business owners. They have made the application and decision making processes faster than ever before.
Merchants looking for small business loans in Puerto Rico should consider turning to firstamericanmerchant.com (FAM). First American Merchant is a top-rated and award-winning payment processing company that specializes in the high risk sector.
If you’re interested in establishing business credit, below you can find the most important things to focus on.
- Age of Your Business
Credibility and financial stability of many businesses depend on their age. However, age shouldn’t be a problem for younger businesses considering to apply for business credit.
- Business Address
A commercial or business address makes your company more trustworthy. There are lenders who provide limited or no credit to businesses with a residential location. You can use a virtual office location, which is more cost effective.
- Business Bank Account
A company’s business bank account is important for establishing order in your business revenues and expenses. Sometimes, lenders may contact bank references. So do your best to have a positive banking relationship.
- Business Phone
Verifying your company phone listing is part of the business verification process. Non-listed businesses may have difficulty getting approved for funding.
In order to figure out whether you are a reliable individual, lenders will consider your personal credit ratings and work experience so to assess your character.
- D-U-N-S® Number
This is a 9-digit number issued by Dun & Bradstreet, an American business services company that provides commercial data. It is the most widely used number that identifies businesses in the United States. Your company’s creditworthiness may be assessed by your company’s business credit report from D&B.
Lenders will also take into consideration the risks involved with the industry you’re operating in.
To approve you for this or type of business funding, your potential lender will take into account your revenues.
- Separate Legal Business Entity
Operating as a sole proprietorship involves greater risks as compared to a corporation or limited liability company (LLC). Pick the right entity structure as it can impact your taxes to be paid, profits to be distributed, and paperwork that you’ll be required to file.
- Trade References
Trade references on applications add to your business’ creditworthiness. To approve you for credit, suppliers and lenders may contact trade references to verify your payment experience with them.
To qualify for an extension of credit, you should meet the standards. Don’t fail to have the above-mentioned items in place before applying for business funding.