Understanding Business Credit | OnDeck Small Business Financing
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Transcript of Understanding Business Credit | OnDeck Small Business Financing
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Build a Strong Credit ProfileTo Increase Your Loan Options
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Ariele Krantzow
Marketing Content Manager
OnDeck Capital
Your Host
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Ty Kiisel
Small Business Educator
OnDeck Capital
Your Presenter
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The World of Small Business Financing Has Changed
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Non-Bank Lenders Deliver $Billions:OnDeck $6+ BillionPayPal $1+ BillionGoFundMe $2+ Billion
There Are More Financing Options Available Today than Ever Before
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Which Means, this Business that Wouldn’t Get Funded Before, May Find Financing Now
Local Restaurant
In Business for 3 Years
680 Personal Credit Score
$750,000 Annual Revenues
$80,000 in Net Profits
Has No Collateral
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Understanding How Credit Works IS CRITICAL
As your business grows beyond the first few months or years
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Every Small Business Owner in the United States has Two Credit Profiles
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Always Paying Cash Isn’t Good for Your Business
I’ve never needed to borrow money or
establish a credit line for my business. Isn’t that great?5 years in Business
Strong Cash Flow
Average Credit
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This Does Not Help Joe’s Business
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NO DATA
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What Makes Up Your Personal Credit Score?
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Payment History35%
Amount Owed30%
Length of Credit History15%
Type of Credit Used10%
New Credit Enquiries10%
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Why Do Lenders Want to Know My Personal Credit Score?
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They’re trying to determine
your creditworthiness
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They Have 3 Questions:
Can you repay a loan?
Will you repay a loan?
What will you do if something unexpected
happens?
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It’s not the best way to
determine how you’ll meet
your business obligations
Your Personal Credit Score and Your Business Credit Profile Tell Different Stories
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Your Personal Credit Score is
a reflection of how you meet
personal credit obligations
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Your Business Credit is More Than a Simple Score
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What Does Your Business Credit Profile Say About Your Business?
General information about your business like
your address and your industry
Information about the credit relationships
you have with your suppliers
Your payment history with any
current business loans and
business credit cards
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The three biggest credit-reporting
bureaus are:
Where Can You Find Your Business Credit Profile?
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The 2 Biggest Drivers That Influence Your Business Credit Profile
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Different Lenders Look at Different Information
Depending on the lender, they will review:
Your personal credit score
Your business credit profile
Your cash flow
Your annual revenue
Your time in business
Your industry
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Know Your Profile
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5 Ways to Start Building a Strong Business Credit Profile
Regularly review your profile
Make sure it’s accurate
Correct any errors
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Don’t Use Your Personal Credit For Business Purposes
5 Ways to Start Building a Strong Business Credit Profile
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It won’t help you build your
business credit profile
It can hurt your personal
credit score
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Establish Trade Accounts With Your Suppliers
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5 Ways to Start Building a Strong Business Credit Profile
Vendor credit is relatively easy to get
A good way to build business credit
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Make Sure Your Suppliers Report Your Good Credit Behavior
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5 Ways to Start Building a Strong Business Credit Profile
If they don’t, it doesn’t help
you build a strong profile
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Use The Credit You Need And Stay Current
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5 Ways to Start Building a Strong Business Credit Profile
The single most important
thing to impact your profile
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A Strong Credit Profile is an Important Part of
Finding The Right Small Business Loan
Why am I looking
for a loan?
Which loan terms best fit
my situation?
How much money do I really
need?
What does my business credit profile look like?
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Non-Profit Micro-lenders
Loan Matching Sites
Online Lenders
Banks and Credit Unions
The SBA
SBA
A Good Credit Profile Isn’t a Guarantee, But it Does Give You Options
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The next webinar:
Wednesday August 23rd
When is Short-Term Financing Good for my Business?
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Q&A
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Thank you.
Have any other questions?please email:
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