7 Ways to Build and Improve Your Personal Credit Score

In his book The Tax & Legal Playbook, CPA and attorney Mark J. Kohler targets the leading tax and legal questions facing small-business owners, and delivers clear-cut truths, thought-provoking advice, and underutilized solutions to save you time, money, and heartache. In this edited excerpt, the author offers quick tips you can use to start improving your personal credit score, which has a direct impact on whether you can obtain corporate credit. Corporate credit is the ability of a company to obtain its own loans under its own credit score. Thus, a company (such as an S corp or LLC) can apply for a line of credit and, without the owner’s personal guarantee, use the money to expand its business. The owner of the company isn't personally liable for the credit line, and their personal credit score has nothing to do with the company’s ability to obtain credit. However, in some instances, having a good personal credit score can expedite the process of obtaining corporate credit. Continue..

Get to Know Your Unsecured Business Loan Options

For many small business owners, unsecured business loans are the most accessible method of financing available in the market.  Because these loans do not require collateral, it is technically easy even for business owners who do not have valuable assets. 

For many small business owners, unsecured business loans are the most accessible method of financing available in the market.  Because these loans do not require collateral, it is technically easy even for business owners who do not have valuable assets.  This article presents your options when in need of an unsecured business loan.

What to Expect

Lending companies extend business loans without requiring collateral because not everyone can qualify for a secured loan. However, unsecured business loans are often limited only to a small amount of financing ($50,000) and do require the applicant to have good or impressive credit.

If you are an owner of an established business with good business credit, applying for an unsecured business loan should be easy.  Needless to say, lenders are looking for a solid assurance that you are capable of repaying the loan according to your lender’s terms and conditions.  Because no real property has been submitted as guarantee for the debts you owe, lenders would be evaluating your loan application based upon the merits of your credit history.

But what if you are the owner of a new or a start business?  What if you have yet to establish business credit?  In reality, it can be a big challenge to get approved for unsecured business loan.  Without business credit to back you up, it will be more difficult to convince a lender to finance your business needs.

The same is true for businesses with a bad credit history.  Although it is possible to find lending companies that offer unsecured business loans for bad credit, the available loan amount would be limited to a smaller value and the interest rates would be much higher than standard unsecured loans. 

How to Get Approved

If you want to apply for an unsecured business loan, it’s important to do extensive research first and get to know all your possible options.  The only way you can be certain that you are being offered a good deal is by comparing different lenders. 

Look out for predatory lenders who are only after one thing - making profit in the expense of borrowers.  Some lenders may take advantage of you particularly if you have bad credit and cannot qualify for standard loans.  You may be offered instant approval regardless of your credit rating.  Is there a catch? The catch is that you will be charged with expensive interest rate and fees all throughout your repayment term.

Make sure that you are dealing with a legitimate lending company before submitting your loan application.  Understand the process involved and the necessary paperwork that you need to prepare.  Do not try to use false information in an attempt to get approved as such a move will only complicate your situation. 

Do not submit multiple applications at once.  Instead, weigh your options carefully and submit only an unsecured loan application to the right lender.  Keep in mind the each time you submit an application to a lender, an inquiry will be made in your credit and all inquiries will be reflected in your report.  Such a move can send a negative impression to a potential lender.

Guaranteed Unsecured Loans: Hassle-Free, Affordable Financing For Your Business

Obtaining financing for business, especially in a start-up stage, is a headache for many business owners. A very simple financing scheme allows acquiring guaranteed unsecured loans with competitive interest rates and high amounts.

Unsecured business loans are great for starting or expanding a business, yet are rather difficult to obtain. Banks see unsecured loans that newly formed businesses wish to take as an extremely high risk, and therefore often refuse to grant them. If they do, the loan provisions are often very unattractive as banks assign high interest rates and restrictive terms to limit their risks. However, there is an easy way around it, allowing borrowing large amounts at decent interest rates – guaranteed unsecured loans for business.

How Are Guaranteed Unsecured Loans Different

How are guaranteed unsecured personal loans different from regular unsecured loans? Unsecured loans do not have any collateral requirements, i.e. they do not require the borrower to put up any property to secure a loan. Unsecured loans are purely credit based, and banks give borrowers money just based on their past credit track and on the written promise of repayment. As unsecured loans mean less default protection for banks, they offset their risks by restricting the loan terms by enforcing shorter durations, lower amounts, and higher interest rates.

How Guaranteed Unsecured Loans Work

Guaranteed unsecured loans, while having the same features as regular unsecured loans, are considered as less risk by banks as they have an added layer of safety in form of a third-party guarantee. The way it works is that a borrower asks another party, whether it is an individual or a company, to issue a written guarantee of repayment should a primary borrower fail to honor financial obligations. Simply put, guaranteed unsecured loans are cosigned loans. As these loans pose fewer risks for lenders, they are often willing to offer competitive interest rates and grant higher loans amounts, allowing the borrower to benefit from lower monthly payments and reduced borrowing costs. Another benefit of guaranteed unsecured loans for business is that there are no collateral requirements, making them perfect for people who do not wish to risk their property, or for the ones that do not have any suitable assets to satisfy the collateral requirements set by the bank.

How To Secure Guaranteed Unsecured Loan For Your Business

The problem that many people face when applying for guaranteed unsecured loans is finding a cosigner for the loan. The easiest solution for this problem is to set a guaranteed unsecured loan for your business. In this case, a business is going to be a primary borrowers and a business owner is going to be a cosigner. It is noteworthy that such scenario is only possible when a business entity is completely separate from the business owner; therefore, sole proprietorships do not qualify. Limited liability companies and corporations are the best entity types to set up in case you intend to use guaranteed unsecured loans.

If you need a guaranteed unsecured loan for your business with tolerable interest rates that would not break your bank and decent amounts that would help to finance your business activities, you need to follow simple steps. First, you have to ensure that you have your business accounts set up completely separately from your personal accounts. Second, you have to find several lenders in order to get the loan quotes. Lender search may be easily performed online or through a loan broker who would be able to match you with few lenders. Last, you would have to select a guaranteed unsecured loan offer that best suits you business financing needs.