To evaluate the chances of defaulting on your loan, these financial institutions will run thorough background checks on your personal and business credit histories and past borrowing behavior. Youll only be offered the best interest rates if you have a strong FICO credit score of at least 700. A credit score of 630 or below could disqualify you. If your business lacks a proven track record of success but your credit score is strong, a lender may ask you to put up collateral, especially when applying for a line of credit, according to Craig Smalley, a small-business lending expert. A line of credit is usually tied to an asset for collateral, Smalley says. For instance, most lines of credit that small-business owners use are second mortgages on their homes, meaning the collateral is the home. Sometimes, a small business is able to secure a line of credit with the collateral being the assets of the business, Smalley says. The takeaway Although personal loans and lines of credit can each provide the financing your small business needs, they arent interchangeable. Consider a personal loan if you need funds for a one-time purchase, as this will give you time to repay the loan over an extended period of time. If, on the other hand, you need money for monthly expenses you know you can pay back on a regular, ongoing basis, consider pursuing a line of credit. Also, if youre asked to put up collateral for a loan, proceed with caution. If you default on the loan, you could lose your property. For more information on how to start a small business, check out our Small Business Guide .
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11:44 The Vintners Federation of Ireland (VFI), the representative body for 4,200 Irish pubs outside Dublin and accounting for an estimated 50,000 jobs, today elected its first ever female president. 11:12 A total of 3,425 new mortgages to the value of 568m were drawn down by borrowers here during the first quarter of 2014, according to the IBF/PwC Mortgage Market Profile. 10:35 Geneva has retained the top spot for the second year as the most expensive city in the world in which to order a club sandwich, at an average of 23.57, according to research released today by Hotels.com. 10:09 eBay turns 10 this week in Ireland. The Dublin office opened in 2004 and deals with buyer and seller protection and provides solutions for customer and technical issues. 09:38 Online start-up Mission Possible is one of 300 European companies to be accepted onto European incubation project Transition.
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