Oct 4 2017

Business Credit Without Personal Credit Checks #installment #payday #loans

#loans without credit check

Business Credit Without Personal Credit Checks

Typically, the number one challenge for new business owners is securing funding to launch, promote, or support the growth of their business. Owners of even the smallest business may need thousands of dollars to pay for start-up expenses, equipment, materials, and advertising. Unfortunately, the reality is that owners of small businesses still in the early start-up stages are often forced to rely on personal credit cards and/or loans to finance their business projects.

Take Russ Leatherman for example. When he set out to start Moviefone, a business advertising movies and their show times at various theaters on an elaborate outgoing phone message system, he had to rely solely on his personal credit cards to pay for all of his start-up, development, and promotional costs. Before long, Leatherman reportedly had over $150,000 in personal credit card debt. For Leatherman, once he had maxed out his own personal credit, there was no turning back. He knew that if he didn’t hit it big with his business venture, chances were he would end up sleeping in a cardboard box on Santa Monica Boulevard. (Lucky for Leatherman that never happened, and in 1999 he sold Moviefone to America Online for over $4 million)

Unfortunately, for every Russ Leatherman, there are thousands of small business owners who are not nearly as fortunate. Often these eager entrepreneurs have much more limited access to personal credit, and when they do max out their own personal credit options, they wind up owing thousands of dollars usually financed at double-digit interest rates for expenses related to a business venture that never even had a chance to get off the ground.

Take Martin for example. Martin and his wife inherited several thousand dollars from a relative and were able to use that money to purchase the all the equipment and supplies they would need to start a carpet cleaning business. With their personal credit cards, they purchased stationary supplies, uniforms, and other supplies they needed to run the business. In no time, their business was up and running, and Martin began cleaning the carpets for their first customers, hopeful that word of mouth would be enough to generate the amount of business he needed to support his family. A few months later, business was still slow, so Martin and his wife decided to use most of their remaining savings to pay for advertising in their local yellow pages and several other publications they hoped would increase their business. While business improved slightly, it wasn’t enough to generate enough income to live on. With their savings depleted and their personal credit used up, Martin’s wife started working in the evenings to bring in some extra income while Martin applied for several business credit loans. Unfortunately, because he had not taken the necessary steps to qualify for a business loan, Martin’s requests were denied.

Regrettably, many small business owners resort to applying for business credit when it is already too late. Maxed out, hurting for funds, fighting with their spouses, and watching their business flounder, these frustrated business owners resort to applying for business credit out of desperation. However, without meeting the preliminary requirements of the commercial lenders, a vast majority of financial institutions are not going to be willing to risk extending credit to a business that is already in trouble. And to make matters worse, with overextended personal credit of the individual business owner, not to mention the likely possibility of several slow payments on their credit history during the months when business has been slow, many lenders will decline an application for personal credit as well. If a failed business owner is lucky enough to be able to generate enough income to continue making timely payments on this extensive personal debt, he just might be able to salvage his personal credit score. However, more likely than not, these frustrated individuals wind up declaring personal bankruptcy and are forced to live with the consequences of bad credit for the next seven to ten years!

Even though taking the necessary steps to be eligible to apply for and ultimately qualify for business credit can be a complicated process, it is a critical part of starting a business that should be started even before the business is up and running.

Written by admin

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