Ginko Financial

If you own a business and want to take out a low cost loan in order to grow your business but you have a poor personal credit score then you will want to look out for a business loan that doesn’t carry out a personal credit check.  Sure, you will probably find a lender who will do this for you, the problem is that the deal you will receive is going to be much worse than for someone who has really good credit.

If you are prepared for this then that’s fine.  You can pay a higher interest rate and also offer collateral in the event of not being able to pay back the loan.  The problem is that the higher interest rates mean that you will find the loan repayments to be less affordable.  Therefore increasing your chances of not being able to pay it back.  When this happens you could lose your home, car or whatever it was that you offered as collateral.

Owning your own business sounds really exciting but the truth is that it can be very stressful.  Most people say they like the idea of being their own boss yet hardly any of them will take the plunge.  They know that there are big risks and at the end of the day they aren’t prepared for it.  Remember, that owning and running a business isn’t just a game.  It’s reality and when things go wrong you will have to pay the price.  People have lost their homes because of failed business ventures.  So don’t take the issue lightly.

As an alternative to taking out a business loan with no personal credit check, you might want to look a building business credit instead.  If your business has no financial track record then this might be a bit more tricky.  However it could be a good option if you are prepared to wait and put in some work.

The basic steps to build business credit is to incorporate or form an LLC.  Then you need to get your Federal Employer Identification Number (FEIN).  If you still don’t have a business bank account then you need to get one so that you can keep business and personal finances separate.  You should also contact Dun & Bradstreet to register for a 9-digit number as D&B are a credit reporting agency for businesses.  Get a listing in the Yellow Pages and have a business telephone line.  Make sure that the address you use for you all of the above is the same.  The final step that you can make is to open up different sources of business credit.  You can do this at office supply stores such Staples and Office Depot.

Over time you will build business credit and have access to loans that are based on the credit of your business rather than your personal credit.  It could be worth the wait because you’ll be awarded with a lower rate of interest.  Make sure that whenever you take out any kind of business credit that you keep up with any repayments because the last think you want to do is to cause your credit score to get affected negatively.