For the past two years, there has serious been obstacles for the American business owner. From radical lockdowns, supply chain issues, good employees and vaccine mandates. We understand the business owner and strive to assist our clients who are seeking business credit restoration and business lending.
The EIDL COVID relief program has finally shut down and should have been since early 2021, than extending it through December 31, 2021. So what current options do business owners have who have obstacles with inflation and supply chain issues?
Improve Your Personal Credit Score
A 625 minimum credit score for a short term business bridge loan is an ideal score to start. The lower your credit score, the lesser amount you will be qualified for and a shorter term on a bridge business loan. Count on a minimum credit score of 680 to 700 or better for SBA and Asset Based Lending, and the more you borrow, the more the lenders seek creditworthiness. You can always check your credit at Experian or MyFico.
Boost Your Business Credit Score
It is extremely easy to check your business credit report, Experian Business is the most user friendly marketplace for ordering and reviewing your business credit report. If you want the best lending terms, your paydex business credit score or Experian Business Score should be in the low risk range, worst case a medium risk. If your business credit score range is the low-medium risk or medium risk tier, FICO SBSS will lien more on your personal credit score than your business credit score. A SBSS score is so important for the business owner.
Seek Alternative Business Lending Only as a Bridge
Expect much less aggressive short term business bridge loans for 2022. A short term bridge business loan is only used for short term purposes, whether it is a four month term or 18 month term, consider an exit strategy. Debt service ratios for short term business bridge loans are presently reduced with some lenders, from adjusting the debt ratio from 25% to 20%, presume this trend to expand. Your goal from exiting out of an alternative business loan is preparing better personal credit scores, a decent business credit score and a FICO SBSS score of 155 or better. This formula is a win situation for SBA 7a, as long as your debt ratios are aligned with SBA guidelines and also prove that you used the short term business loan for working capital, meaning copies of receipts. SBA 7a requires a FICO SBSS score of 155 or better, if your loan amount is less than $350,000. Most lenders use the FICO SBSS score model regardless of your loan size and type of business loan. If you don’t want SBA 7a, you may opt to Asset Based Lending or another alternative business loan with longer terms. If you request longer terms for an alternative business loan without hassling with SBA 7a, a minimum credit score of 660 or better is necessary.
For more information on how we can help Floridians locally with their business lending and business credit restoration in Palm Beach Gardens and Jupiter FL, please fill out the online contact form about your concerns or give us a call at 561.244.9914. Read what our valued clients have to say about First Pro Capital and Credit Consulting Experts on our Testimonials page