If you think bad credit history will stop you from obtaining business credit, think again. It’s likely that even with bad personal credit, business  creditors will extend credit to your business. Phillip Thow says to deal with the ins and outs of the business credit industry, you need a business credit expert to help you go through the system to determine which lenders will be more likely to lend to you considering your bad credit history.
Phillip Thow says you should give business credit applications a go, regardless of your credit history. If you never try, you’ll never know! And there are business credit experts available to help you with this process and to direct you down the path of building business credit, even with a history of bad credit.
There are two types of loans that apply to business loans: secured and unsecured. Secured loans require a promise of asset or a cash reserve with the lender. If you don’t make payments and thereby default on a secured loan, the asset or cash becomes the property of the lender. With an unsecured loan, there is no asset or cash reserve required. An unsecured loan is a promise from you to the lending bank that you will pay them back as stated in the loan agreement. They are taking your word! Unsecured loans do come with higher interest rates. Since the bank has no collateral or assets in reserve, they must charge higher interest rates to assure their protection. Phil Thow mentions the likelihood that your business loans bad credit note could be purchased by a third party. In a case like this, the lender acquired your previous notes with the terms and understanding that you will pay them back at stated in the loan agreement.
Phil Thow knows that it requires a business credit expert who understands the lending business and in turn help to lead you through the easiest path to acquiring loans; even with less than perfect credit. Although you may not believe this, banks DO want you to be successful. They understand that everyone, those with less than perfect credit included, deserves a second chance in business. So, don’t delay; call you business credit expert today and get started on the path to prosperity!
Business line of credit; a wonderful asset in building your business. With a business line of credit, you have the flexibility to act appropriately in the rocky first stages of starting a new business. With a new business, a business line of credit can get you ahead and on your way to profitability faster than if you had no cash, is also gives you the cash flow to expand as and when needed. Phillip Thow says with a business line of credit, the cash is always there and ready to be utilized in the most effective manner.
While business credit cards are the way to begin building that business credit foundation, the interest rates can be sometimes less than ideal. But once you have that foundation built, moving on to the next level of credit – business lines of credit – will get you better interest and easier access to cash. Phillip Thow says that the savings on interest rates will quickly start increasing your profitability. Business credit cards and business lines of credit are two great ways to start building your business credit; and quickly. Paying your business credit cards and business line of credit payments on time in turn then increases your ability to access MORE cash at even LOWER interest rates. Taking care of your business credit from the start is of the utmost importance; always pay on time says Phil Thow.
Phil Thow states that you can save more money on business lines of credit by making your payments on time! If you pay timely, you will have no additional charges or interest to pay. If you pay late, you pay additional fees, interest penalties and late fees, just as with you business credit cards. A business credit expert can show you how to steer clear of having to pay fees, penalties and additional interest.
During these strenuous economic times, managing your credit card use and business lines of credit is crucial. A business expert can help you determine the best way around these difficult times so that you don’t find yourself in a hole of debt and on the verge of business failure. With the help of a business credit expert, they can show you how to obtain business lines of credit and how to manage them wisely. Phillip Thow knows that while the benefits of using a business line of credit are many, everyone needs help now and then so don’t make the mistake of going it alone. Get help from the start to avoid any pitfalls and to make sure that you are on the right business credit path!
Debt to Income Ratio: Phil Thow
A great measurement of your financial stability that banks use to determine whether or not to lend money to a business is that business’s debt to income ratio. This is a comparison of your income to your outstanding debt. Ideally, the bank wants to see you income ratio exceeding your debt ratio. They want to see that you are making more money that you are spending. This is favorable to you and whether or not the bank agrees to lend you money. Phillip Thow, business expert, suggests being mindful of your debt and making sure that your income always exceeds it. This measurement will also figure into your interest rate that you receive on loans. Phil Thow says the lower your debt is and the higher your income is, the lower your interest rate will be.
This debt to income measurement is crucial and one of the main factors in the lending industry. Phil Thow asks “would YOU like to invest in a company that owes way more money each month then they are bringing in?” Highly unlikely. And banks feel the same way. Phillip Thow stresses the importance of keeping your debt in check with your income.
To figure out what your own debt to income ratio is, do this simple math: divide your annual income by twelve to get your monthly figure. Take your monthly expenses and add them up and then divide them by twelve as well. From here, take these two numbers and divide your monthly debt by your monthly income and this is your debt to income ration. Phillip Thow says that the banks and lenders keep a standard and that standard does not exceed 36.
Maintaining a balanced debt to income ratio will create an easier time when trying to find credit and lenders willing to lend to you, said Phillip Thow. For start-up business owners, this is extremely important. If you begin as a bad risk, it’s hard to build it back up. Keep you debt to income low and you’ll find an easier time obtaining loans and credit says Phil Thow. Contact Phillip Thow.
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