Before you receive an approval for a loan for your company which may be centered around you, the lender will surely look at your credit score other than your company’s ability to repay the loan. These days most of the small businesses are either proprietorship or partnership. That leaves barely any distinction between owner/s of the company. This fact makes the lenders scrutinize your personal credit history along with your business plan to decide whether to sanction you a loan. Sometimes, with some lenders, the creditworthiness of the applicant determines the Business Loan interest rates. Therefore, it makes a lot of sense if you checked with your credit score before you applied for a loan.
When your credit score plays a pivotal role to get your loan sanctioned-
The lender would like to check your income and profitability of the business. In case your business is new the future earnings will be checked that whether your business will be earning enough so as to pay back your loans to the lenders. Your income and credit history will be checked before you are sanctioned a loan
How will it work-
Your debt to income ratio will be checked to see that your debts are within set limits.
It is slightly more elaborate, check out here for the nuances-
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.