Also, try not to rack up any additional business debt during the loan application process, as this can have a negative affect on your score and might not sit well with lenders, according to Morhet. If youve maxed out your credit accounts, it shows you wont have any money left over at the end of the month to repay the loan, Morhet says. So the more you can pay down and have available credit on your report, the more it shows the bank you can afford to take on the loan. 4. Present a detailed credit plan A business plan shows how you plan to grow sales. But your credit plan or policy outlines which customers youre going to extend credit to, how much credit youll give them, how youll be paid, and what will happen if youre not paid on time and in full, according to Dunn. It tells the bank you are going to get all these new customers, but youre going to make sure theyre creditworthy before you ship them anything, because you want to get paid and you want to get this loan, Dunn says. How can you put together a solid credit policy if you dont have one yet? You can start by crafting a mission statement for your policy, just like the one you have for your business plan. It should say what you want your credit policy to do for your business, according to Dunn. It can be as simple as saying your credit department will offer credit to all customers that fill out an application and are found creditworthy, Dunn says. Next, develop the policies and procedures that will govern your credit policy. This will include your payments terms, credit limits, how credit applications will be processed, and what will be done if one of your customers is late making payments.
For the original version including any supplementary images or video, visit http://www.nerdwallet.com/blog/small-business-finances/5-ways-avoid-rejection-small-business-loan/
5 Ways to Avoid Being Turned Down for a Small Business Loan – CreditBorrow.com
Just like a personal credit score reveals a persons risk of repaying a loan, a business No comments yet.
For the original version including any supplementary images or video, visit http://blog.creditborrow.com/?p=18850