February 19, 2019
Small businesses are the heart of the U.S. economy. They make up an incredible 99.9% of all businesses in the country. What they share in common is the blessing—or burden—of a business credit ranking. The health of your score can determine your access to funds. But it's not the be-all and end-all to your business growth. Read on to understand what business credit is, how to improve your score, and how you can still access cash with a less-than-stellar score.
Similar to your personal credit score, every business is assessed and ranked. Factors that make up your score include credit utilization ratio (how much credit you have versus how much you're using), length of credit and payment history, and any outstanding debts, among others. Your score signals to lenders your reliability to repay a loan, otherwise known as your creditworthiness.
Unlike personal credit scores, business rankings use a different scale. While FICO scores range from 300–850, business rankings generally use a zero to 100 range.
NerdWallet advises the best and perhaps most obvious way to boost your score is to pay your bills on time. Here are some other options to lift your levels.
Bad credit doesn’t have to seal your small business fate. Here are three alternative funding sources to fuel your growth.
Another way for near-immediate access to funds is a Hometap Investment, which gives homeowners access to the financial boost their small businesses need without debt, monthly payments, or interest.
Grow at Your Own Pace
Every business experiences financial highs and lows. Your immediate cash need may not match up with a lengthy loan process, however. And, with low credit scores, getting that loan in the first place may be difficult if not impossible. But, with the right strategy in place, you can increase your business credit score, opening the door to more financial options for your small business.
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Before accessing your home equity through a home equity loan or HELOC, compare all your available options, including home equity investments, to find your best option.
Learn how you can achieve your financial goals while helping your parents plan their retirement with a home equity investment from Hometap.
Find out which small business loans you qualify for and the best fit based on your business type.