If you are seeking business funding and need to personally guarantee a business loan or credit cards, start by checking your own personal credit score.
Your personal credit score will have an impact on whether or not you will be approved, how much money you can borrow, and even the interest rate and repayment terms.
Here are more tips on things you should do before you take out a business loan that you can be personally held liable for repaying:
- Know What You Are Signing: Before you sign a loan or other financial agreement, check the fine print or ask the lender if they will or will not be reporting business debt on your personal credit report.
- Shop Around: Local banks are often the best place to secure business loans, but shop around. Look for the best rates and terms, but consider that slightly higher interest rates may be a better choice if it means you do not have to personally guarantee your business' debts, or, that your business debts will not be reported on your personal credit report.
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Consider Other Options: Although programs are not as liberal as they once were, be sure to check out financing options through the Small Business Administration (SBA.)
The SBA itself does not directly provide financing to small business owners, but may facilitate financing through partnerships with public and private organizations. The SBA assists qualifying for-profit women business owners who seek venture capital through equity financing and debt financing.
To learn more about microloans and SBA programs start be reading What Are Mircoloans.
