Small Business Loans

Does Your Credit Score Matter When Seeking a Business Loan?

While you’re looking for business funding to support a business, lenders will consider your personal credit score when evaluating small business loan applications. A FICO credit score or Fair Isaac Corporation Credit Score is determined by a variety of factors, known as the 5 Cs of credit: character, capacity, capital, conditions, and collateral. The three characteristics that determine if you are considered creditworthy by a lender include how reliable you have been at repaying debts, the number of on-time loan payments, and your debt to income ratio.

FICO Score Ranges

Exceptional (800 – 850)

Very good (740 – 799)

Good (650 – 739)

Fair (580- 649)

Bad ( 300-639)

• highest loan amounts
• lowest APRs
• long repayment periods of up to 25 years
• lots of available loan types

• $30,000 to $500,000 loan amounts
• 2-5 year terms
• Fixed interest rate from 7.99%
• Monthly repayments

Working Capital Loans

Working capital can help you take care of immediate needs in your business, whether that is a cash-flow shortfall or a new business opportunity. No collateral is required for our working capital loans or short-term funding, the required documentation is limited and perfect credit is not needed.

Nearly every industry can get a working capital loan. Working capital loans are perfect for business owners who need short-term funding to grow. Working capital loans are simple, fast, and affordable and are designed to help with seasonal shortcomings with revenue, or the need to boost inventory.

Equipment Financing

Are you in the need of new business equipment but don’t have the necessary capital on hand to pay for it? Equipment financing done with Capital for Business is truly simple fast and affordable. We are a top-of-the-line marketplace alternative lender that can provide you with same-day funding to purchase any type of equipment that your business may need.

Whether software, heavy construction equipment, vehicles, and much more. You will repay your equipment loan with low monthly payments and we keep the upfront cost minimal to something that your business can afford.

• No collateral needed
• Simple, fixed monthly payments
• Same-day funding up to $250,000
• Potential Section 179 tax deduction

Invoice Factoring 

At Capital for Business, Invoice factoring is a quick and flexible source of funds for businesses that are waiting for outstanding receivables to pay. We simply utilize your accounts receivable as the collateral and advance funds against the face value of your invoices. Invoice factoring allows your credit line to grow proportionately with your sales cycle. We can fund as little as $5,000 a month and up to $2.5 million for larger companies.

• Competitive receivable financing rates with same day decisions
• Improve Cash Flow Without Incurring Debt
• Factoring Outstanding Receivables up to $2.5 MM

Business Credit Cards

Business credit cards act as a revolving line of credit and are used for both purchases and payments. Businesses use credit cards with other loan products and are usually used for working capital purposes. Pre-revenue and startup companies can apply and receive these cards also, as well as established companies, of course. The biggest factor for approval is the strength of personal credit.

Product Overview:

• Up to $150k
• Rates: interest rates starting at 0% intro rate for the first 6-18 months* and up to 19.99%
• Repayment: Revolving, credit cards are personal lines of credit.
• Fees: 3% to 5% origination fees
• Payments: Low monthly payments
• No collateral required

Credit Score: Must have a good credit score, at least a 680-fico score, good credit history, and a credit utilization not over 35%. Bad credit is not allowed

No Annual Revenue requirements to apply

• *not all cards have intro rates in our business credit card network

Qualifying Factors That May Affect Your Ability to Get Approved for a Business Loan 

What are Lenders Looking for on a Small Business Loan Application? What matters to lenders besides credit scores? Lenders tend to request more information, although online and alternative ones require less. When you contact Capital for Business, we ask that you provide us with limited information in order to make the process faster and more efficient. Generally, we look at a business’s annual revenue, cash flow trends, as well as the owner’s credit history of both the business and the individual.

Annual Revenue:

Your business’s annual revenue is one of the most important eligibility factors when it comes to getting small business loans. If you apply and are approved, then typically 8-12% of the company’s annual revenue will be what you receive from lenders.

Profitability:

Lenders also want to know if a business is profitable. A borrower’s chances of approval could be increased by demonstrating significant growth in the last 3 months or more.

Current Debt Obligation:

Lenders will consider what you already owe to other lenders when approving a new business loan. If you have an existing small business loan with another lender, your decision to take on more debt may be risky and could hinder the approval of future loans from various sources as well.

Cash Flow:

Lenders want to know that you can manage the cash flow of your business and ensure loan payments are made. They consider this when determining whether they will approve a small business loan application.

Credit History:

Lenders in the Capital for Business marketplace offer small business loans with bad credit. Lenders will be looking for red flags, such as bankruptcy or foreclosures.

Tips on how you can improve your credit and increase your chances of being approved for a better business loan in the future

Your credit score is one of the most important signals of your financial health and reflects how well you manage your finances. Depending on the number, lenders might be able to tell whether you’re financially responsible based on this one report alone. If you’d like to improve your credit score, there are several simple things you can do. It takes time and effort but in the long run, it will pay off.

1. Reviewing Your Credit Report

To improve your credit, it helps to know what might be working in your favor (or against you). That’s where checking your credit history comes in. Pull a copy of each major national bureau: Equifax, Experian, and TransUnion. Factors that contribute to a higher score include on-time payments with low balances for cards/loans; having different accounts; older accounts; minimal inquiries. Late or missed payments can lower the account as well as high card balances.

2. Pay your bills on time to improve your credit score

It is important that you pay off all debts in a timely manner. Late payments can cause significant damage and take away from what would otherwise be an excellent FICO score because it will make up 35% of the final number, thus giving lenders more reason not to trust you with money. Over 90% of top lenders use FICO credit scores to determine a customer’s ability to pay back loans. The score is based on five factors: payment history, credit usage, age of accounts, and the mix between different types (consolidation) or the number of new credit inquiries.

3. Aim for 30% Credit Utilization or Less

Credit utilization refers to the portion of your credit limit that you’re using at any given time. It is one of the two most important factors in FICO credit score calculations and so paying attention to it can help improve your overall financial situation. The simplest way to keep this number low is by making sure you always pay off all monthly purchases, however, if spending more than necessary isn’t possible then aim for a total outstanding balance no higher than thirty percent (30%) of our total credit limits on average each month.

4. Limit new credit Requests—especially ‘Hard’ Inquiries

The difference between a soft and hard inquiry can affect your credit score, according to financial experts. Soft inquiries often include checking your own credit or giving permission for employers to check it during the hiring process. Hard inquiries result from banks who want you as their client but have not yet established business with you; these types of searches will lower one’s rating by 5-10 points depending on how many are in that year alone.

5. Keep old accounts open and pay delinquencies

If you have old credit accounts that you’re not using, keep them open. This will increase the average age of the account and improve the health of your score. If a card has been closed but there still is an outstanding balance on it, don’t close it down until the debt is paid off or transferred to another low-interest rate card as this can reduce available credit which could impact the utilization ratio negatively.

In addition to keeping old accounts open with no active balances, when dealing with delinquencies make sure they are reported accurately by ensuring creditor contacts borrower directly first before reporting negative information for proper resolution between both parties before hurting overall history reliability rating.

6. Track Your Progress Using Credit Monitoring

Credit monitoring services allow you to see how your credit score changes over time. These services monitor for any changes in your report, such as a paid-off account or new accounts that have been opened. They typically also give access to one of the three major rating agencies (Equifax, Experian, and Trans Union) where they may be updated monthly with an individual’s current status.

Why should you apply for our small business loans?

Capital for Business has been serving small businesses nationwide for over 15 years and knows what the entrepreneurs value the most. That is why we offer:

• favorable approval rates
• we offer online business loans for small business
• we offer bad or poor credit business loans
• custom-tailored service with a dedicated loan specialist
• reasonable eligibility requirements
• flexible repayment terms on a daily, weekly, bi-weekly, or monthly basis
• hassle-free application process
• same-day approval

Capital for Business is your reliable small business loan marketplace

Are you looking for ways to get small business financing? Capital for Business is a reliable marketplace lender trusted by thousands of small business owners across the U.S. and Canada.

For more than 15 years, we have been helping small businesses grow and develop their companies. Flexible terms and rates based on your business’ performance, and not solely personal credit history, may make Capital for Business loan an attractive option.