There is a time in a business’s lifespan when you’ll have to start looking at financing options. This might be to cover for some unexpected event, or maybe you’re starting to eye a second location. Some business owners might want to start expanding their product line, or invest in marketing.

Too many people, however, don’t have a clear idea of how much they really need, or if they actually need financing in the first place. There are also cases where the debt could actually sink you. This is why it’s important that you give it some strong thought before you make a decision.
What’s My Business and Personal Credit Score?
First of all, you have to know that both your business and personal credit score could have an effect on your application. This is especially true if you haven’t had the time to establish a strong business history. You can get one free copy per year of your credit report from all the major credit reporting agencies: TransUnion, Experian, and Equifax. You can get your business credit score from Dun & Bradstreet, Experian Business and Equifax Business, but you’ll have to pay.
What Are My Options?
Now that you have a better idea of your credit situation, you can start looking at what you can actually get. You should also check if you have any assets that you can give up as collateral.
If you have bad credit and you want to go with a traditional financial institution, chances are you won’t be able to get anywhere without collateral, and you might still get rejected. Not to mention that the process might be grueling and lengthy.
If you have bad credit, you’ll probably have no choice but to go with alternative lenders. You have lenders like AdvancedPoint that will look at various other indicators of your business’s health to tell if you could be eligible. They might pay more attention to cash flow and reserves over credit history, for instance.
Whatever you do, however, make sure that you only apply for financing if you think you have a chance. If you’re uncertain, only use services that will perform a soft inquiry first to see if you could realistically get a loan. This will prevent inquiries on your credit report, which can affect your credit negatively.
Do You Actually Need a Loan?
This is the last, yet probably most important question that you can ask. The reason for your loan will make a major difference on whether you’re accepted or not, and you should take a loan for superficial or unproductive reasons. You don’t need a loan to make cosmetic changes to your office space; however, someone may be more inclined to give you a loan if you want to expand your service offerings, or pay for ads.
So, before you even start looking for a loan, you have to answer all of these questions. Once you have a clear answer, you can start shopping and look for the best options for you.