Credit Score and Business Funding: How Your Credit Impacts Your Options

Your credit score is just one factor in business funding. Let's explore how different funding options work with various credit profiles.

Credit Requirements by Funding Type

Understanding what's needed:

• Traditional Loans:
  • 680+ typically required
  • Strong history needed
  • Personal guarantees common
• Alternative Options:
  • Merchant Cash Advances: Focus on revenue
  • Equipment Financing: 600+ typical
  • Invoice Financing: Customer credit matters more

Building Business Credit

Steps to improve your profile:

• Key Actions:
  • Establish business credit file
  • Build trade references
  • Monitor and maintain scores
• Best Practices:
  • Separate personal/business credit
  • Pay bills on time
  • Maintain good ratios

Every business can access funding, regardless of credit score. Let's explore the best options for your situation.

Options by Credit Profile

Understanding available choices:

• Building Credit (Under 600):
  • Merchant Cash Advances - focus on revenue
  • Equipment Financing with down payment
  • Revenue-based funding
• Improving Credit (600-680):
  • Online lenders
  • Equipment financing
  • Business lines of credit
• Strong Credit (680+):
  • Traditional bank loans
  • SBA loans
  • Premium rates available

Making the Right Choice

Consider these factors:

• Immediate Needs:
  • MCAs for quick funding regardless of credit
  • Revenue-based options for flexibility
  • Asset-based solutions available
• Long-term Strategy:
  • Build business credit profile
  • Improve personal credit
  • Expand funding options

Remember, many successful businesses use MCAs and other flexible funding options while building their credit profile for additional opportunities.