Millennials have been accused of killing every major industry out there, but they’re using their abilities to create new businesses in their place. With the prevalence of the internet, freelance workers account for 35% of the US workforce. So if you’ve got the next million dollar business idea, it’s time to start your own business.
Here are four things you should know before you start applying for loans.
1. Fix Your Credit Before Applying for Loans
When you're looking to start a business, lenders will look at your financial history. After all, your company doesn't exist yet and hasn't proven that it's profitable. Your credit is going to determine if you can get approved for a business loan, so make sure you've fixed your credit.
Pay off old debt, open new accounts if it will help, but make sure you've got a plan. If you need help, contact us for credit repair in Dallas. Regardless, this is the best place to start, even if you purchase an aged corp.
2. Use Aged Corps
Aged corps, sometimes referred to as shelf corporations, are companies that haven't had any activity. They were started and then "put on the shelf" for later. And you can buy one of these to get the aged corps' credit or to show investors that your company has been around for a while.
3. Find Investors
Before you apply for a loan, think about finding investors. If your business already has capital, loans are going to come easier. You'll finance less, and banks like it if you've got skin in the game. It shows that others believe in your business.
4. Add Tradelines to Lengthen Credit History
Tradelines are another way of saying "credit account" or loan. They're a large part of your credit report. There are a few things you should consider when adding tradelines.
First, will you benefit from opening a new tradeline? If you need to add length to your credit history, this is probably not the best choice. If you need to lessen your debt to income ratio or need a broader mix of credit, then you might want to consider this. If you need a longer credit history, you can get added as an authorized user to an existing credit account.
If you follow these steps before you apply for a business loan, you'll increase your likelihood of approval. Contact us today to learn more, or download our free credit repair checklist to get started improving your credit today.
