Why You Can’t Get A Bank Loan For Your Small Business : Powerhomebiz.com

You have poor personal credit history. Poor credit could make it difficult or temporarily impossible to achieve your dream of getting bank financing for your startup business. Banks and other lending providers look for good personal credit history when reviewing business loans. In fact, it is one of the first things that a bank looks into when reviewing loan applications. Alas, a poor credit history cannot be repaired overnight. In the United States, a poor credit history can haunt you for seven years and for 10 years in the case of tax liens and Chapter 7 and 11 bankruptcies. If your credit history is less than perfect, it may be worth a shot to include a note in your loan application explaining what youve done to rectify some of the black marks in your credit history. 2. You do not have your own money in your business. You go to a bank hoping to get the money needed to jumpstart your business only to find out that they require that you have some money yourself in the first place! The reality is that banks will hardly give you 100% of the capital you need. They want to see you invest in your own business. Your owners equity shows them that you believe that the business will actually make money to the point where you are willing to put your own money at risk.
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