Now that you’ve got a good grasp on what your credit score is and what that means for your funding, it’s time to take a look at your other borrower qualifications.
Personal credit scores are just one of the many business loan requirements out there. Lenders will look at a number of other factors:
- Business credit score
- Business revenue
- Cash flow
- Time in business
- Debt load (how much outstanding debt you have)
- Business industry
So yeah, your credit score matters. But if you’ve got sky-high revenue and a rock-solid business that’s been around for many years, you’ll have an easier time qualifying for financing than if you don’t have those things.
And the better you understand your situation, the less time you’ll waste applying for financing you can’t qualify for. That’s why we recommend you take the time to figure out exactly what your qualifications look like. That way, when you start narrowing down your list of options, you’ll be able to easily decide which lenders are doable, which are aspirational, and which are out of the question (for now, at least).
One factor you should pay special attention to is your collateral. No, you don’t necessarily need collateral to get a business loan. Many online lenders offer unsecured loans, or loans that don’t require any collateral to get. But if you have collateral, you can use it to get a secured loan―which probably means a lower interest rate for you. Plus, secured loans are often easier to qualify for.
Once you understand all your borrower qualifications, you’re ready to start looking at your financing choices.