Small Business Financing: Securing Low-Interest Business Loans

Business credit experts can help protect a small business owner’s credit and wealth in the event of a bankruptcy of their business.

When it comes to financing a small business, getting it right the first time makes all the difference. For small business owners, securing the financing their new location needs to succeed, and getting a low-interest rate on business loans, is essential to getting a business off the ground. While many small business owners pride themselves on their entrepreneurial spirit, financing a new place can often be too much to handle alone. If not done correctly, it can carry personal liability for the business owner. Therefore, when looking to finance a small business, new business owners need to seek expert advice and increase their chances of securing a lower interest rate.

How Can a Small Business Secure Financing?

Perhaps the single most crucial aspect of securing business credit is to make sure the business is incorporated or limited liability. Without either of these designations, the banks and lending institutions that provide business loans, and credit lines, will come to see it as a personal loan, which carries with it a personal guarantee. In essence, if the business goes bankrupt, then the individual is responsible for that debt, if, and only if, that business is not incorporated or limited liability. With numbers that estimate that over half of all new companies fail in the first year, it is incumbent upon new business owners to separate their credit, from their business credit.

Who Can Help Set up Small Business Financing?

A business credit advisor, or business credit expert, is the best source for setting up business credit and can help point the way to adequately financing a small business. Business credit advisors understand the inner workings of setting up a business as a limited liability or incorporated entity. They have not only the ability and know-how but also the expertise in showing new business owners the pitfalls of business credit. Besides, they get it right the first time. It is perhaps most important, as any minor mistake is often complicated to overcome, and takes a tremendous amount of time and effort to correct.

Aside from the benefits of setting up the business, a business credit advisor can help provide insight into how to properly manage a company’s credit rating, its credit score, and using this score to negotiate favorable interest rates on business loans. Many small to medium-sized businesses are unaware that they can take an active role in determining their business credit score, and use that score to secure lower interest loans. While it doesn’t happen overnight, it will happen if that small business owner takes the time to manage their credit with a business credit expert properly.

What is the Difference Between a Personal Loan and a Business Loan?

A personal loan not only has a higher interest rate but also carries with it a personal guarantee. In contrast, business loans and lines of credit almost always have lower interest rates. The benefit of being incorporated or limited liability, and having business loans, is two-fold. First, lower interest rates on business loans and credit lines save companies money. Secondly, in the event of an unfortunate bankruptcy of the business, the business owner is not liable for that debt.

It can often be incredibly frustrating to secure the business loans, and credit lines small business owners need to get their business started. It can be both confusing and dangerous, and if not done correctly, can cost the business owner a tremendous amount of personal wealth. Small businesses need to make sure they get it right the first time. Working with a business credit expert is the easiest way to guarantee their business credit and personal credit are separate from one another.


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