Benefits of a Business Loan With No Personal Guarantee

Obtaining a business loan with no personal guarantee is beneficial because by separating the finances of the business from that of the business venture, the entrepreneur reduces the personal risk in the event of a failure of the business.

Initial Steps

The first steps of creating the business credit profile are quite simple. You have to register the business, incorporate it, procure all the necessary permits and licenses, and obtain a business telephone number. You have to make certain that this telephone number is listed in the Yellow Pages directory. Most financial institutions and banks look into these factors before extending credit to your business. For building business credit, the following other steps are required as well.

business creditFor example, you need to obtain a few business credit cards for the purpose of funding small business purchases. Ensure that you will have the funds to repay the credit card companies in full when the time is due for payment; otherwise it may result in damaging the credit rating of the business. When the credit card companies report this pattern of positive payment to the credit rating agencies, you would have little problem obtaining a business credit with no personal guarantee.

Ensure Listings

You can also enhance the business credit profile by ensuring that it is listed with all the business credit bureaus. Besides the main credit bureaus, you can contact the niche bureaus and ask them to rate your company’s profile. To improve business credit, it woudl also be beneficial to approach suppliers and vendors for credit. Request them to supply their services and goods on credit basis and then pay them back in a timely manner. The vendors will report the record of prompt payments to the credit bureaus.

The business owner can also pledge the assets of the business with the bank to obtain a low-cost loan. When the loan is serviced properly, the bank would be willing to increase the loan amount even if there is no corresponding collateral.

Stick to Business Loans

Without using your personal credit score to secure funding for your business, you are able to use personal credit for personal emergencies. A shrewd entrepreneur is one who starts building the business credit score while they concentrate on building up the business. This would help the business to survive over the long run when funds are injected into the business at times when they are required.

By working at an early stage at convincing creditors to extend business credit without a personal guarantee required, the business owner can build a sound foundation for obtaining funds as and when required. This is critical when there is a need to change the business direction to meet changing or emerging market trends and thus ensures the continuing success of the business through the years.

Click here to get a business loan with no personal guarantee online. It only takes a few minutes to fill out the two-page application form and approval takes as little as 48 hours.



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