{"id":22047,"date":"2019-05-07T06:00:02","date_gmt":"2019-05-07T11:00:02","guid":{"rendered":"https:\/\/www.hostgator.com\/blog\/?p=22047"},"modified":"2019-04-19T11:34:46","modified_gmt":"2019-04-19T16:34:46","slug":"5-steps-to-improve-your-chances-of-getting-a-good-online-smb-loan","status":"publish","type":"post","link":"https:\/\/www.hostgator.com\/blog\/5-steps-to-improve-your-chances-of-getting-a-good-online-smb-loan\/","title":{"rendered":"5 Steps to Improve Your Chances of Getting a Good Online SMB Loan"},"content":{"rendered":"\n

For eCommerce businesses<\/a>, the costs to startup may be small compared to a brick-and-mortar ventures. But the costs to achieve real growth can hinder them just the same. <\/p>\n\n\n\n

Funding new initiatives-a site redesign, an expansive digital marketing campaign, a bulk order on inventory-is difficult without outside capital. And to achieve that capital, most businesses (particularly small eCommerce firms) won\u2019t get venture capital funding. They\u2019ll need to use debt financing instead. <\/p>\n\n\n\n

Debt\nfinancing (usually in the form of a business loan, line of credit, or other\nfinancing that requires paying back the principal plus interest) is a risk, but\nit\u2019s also how business owners maintain full control of their business while\naccessing funds that wouldn\u2019t be available to them otherwise. <\/p>\n\n\n\n

These days, eCommerce business owners may choose from a variety of loan options. Not all of these funding options will sound good to you-especially if you\u2019re a new business, or if you\u2019ve struggled with credit in the past. <\/p>\n\n\n\n

\"start<\/a><\/figure><\/div>\n\n\n\n

Whether\nyou\u2019ve already applied for a small business loan and come away disappointed\nwith the offers, or you\u2019re gearing up to apply with either your local bank or\nan online lender, there are some important steps you can take to improve your\nchances of getting a quality, low-interest business\nloan<\/a>\noffer and moving ahead with your plans. <\/p>\n\n\n\n

Consider\ntaking some or all of the following five steps: <\/p>\n\n\n\n

1. Build your business credit <\/h2>\n\n\n\n

Just\nas you have a personal credit score (more on that below), you have a business\ncredit score that reflects the creditworthiness of your business history. <\/p>\n\n\n\n

Your\nbusiness credit score-which typically ranges from 1-100-is financial shorthand\nfor whether lenders or vendors should feel comfortable extending you credit, as\nwell as for how much and on what terms.<\/p>\n\n\n\n

Generally\nspeaking, many of the main factors that determine your score are universal.\nKnowing what they are is the first step in knowing how to work on them or\notherwise improve their standing in the eyes of credit bureaus. <\/p>\n\n\n\n

In\norder to build up your business credit, focus on the following tactics: <\/p>\n\n\n\n

Dispute errors and inquiries<\/h3>\n\n\n\n

Get\ninto the habit of checking your business credit report regularly. Credit\nbureaus are far from perfect, and sometimes they will report charges, pulls, or\nother dings to your record that aren\u2019t accurate. <\/p>\n\n\n\n

If\nyou see an inaccuracy in your report, don\u2019t wait for the record to correct\nitself: Contact the bureau and dispute it. Even a few points off your score can\naffect your application.  <\/p>\n\n\n\n

Decrease your credit utilization ratio<\/h3>\n\n\n\n

Your\ncredit utilization ratio is the amount of credit available to you compared to\nhow much of that credit you\u2019ve used. If you have a business credit card and a\nline of credit, and both of them are maxed out, that tells lenders that you\nalready have a fair amount of outstanding debt to pay back. <\/p>\n\n\n\n

Pay\noff your credit balances and keep them as low as possible, particularly ahead\nof a loan application. <\/p>\n\n\n\n

Pay your bills on time<\/h3>\n\n\n\n

It\u2019s\ncrucially important to pay all of your bills and debts on time. Whether it\u2019s\nyour utility company or a vendor, falling behind on your payments can\nnegatively impact your score. <\/p>\n\n\n\n

Form responsible credit habits<\/h3>\n\n\n\n

If\nyou haven\u2019t been paying much attention to your business credit score, or carry\na low score because of a prior venture gone bad, it\u2019s time to start building up\na positive credit history. Obtain a good business credit card and start using\nit while making regular repayments. Even this simple process can help rebuild\nyour score over time while instilling positive spending habits. <\/p>\n\n\n\n

Add trade references to your credit report<\/h3>\n\n\n\n

If\nyou have a good relationship with a vendor or supplier, see if you can create a\ncredit account with them. Assuming you make consistent on-time payments on that\naccount, you can add them manually as a 'trade reference'\u009d to your\ncredit report<\/a>\n(assuming they don\u2019t already share payment data with a credit reporting\nagency). These references demonstrate your fiscal responsibility and history\nwith vendors or providers like wholesalers and attorneys. <\/p>\n\n\n\n

2. Improve your personal credit score<\/h2>\n\n\n\n

It\u2019s\ntrue: Lenders want to make sure that you\u2019re just as responsible a spender in\nyour personal life as you are in business. <\/p>\n\n\n\n

Remember,\nyour personal credit score ranges from 300 to 850, with 850 being a 'perfect\nscore.'\u009d Here\u2019s a general breakdown of credit score tiers<\/a>: <\/p>\n\n\n\n