Has challenged or overused personal credit limited your access to business capital? There are programs that offer unsecured business credit using a credit partner. You can look at this opportunity on our unsecured business financing page. Do you have friends and family who want to help but don’t have any cash? Consider the possibility of someone becoming your business credit partner, also called a guarantor. This is someone who believes in your business and has “Good Credit.”
Just a note: A business guarantor is different from a co-signer. The credit received in this specific situation reports to the business and not the guarantor’s personal credit. In a co-signer situation, the credit received will also show on the co-signer’s personal credit.
So, what is ‘Good Credit?” The closer your guarantor is to these key criteria, the more likely your business is to secure $100K or more in lines of credit:
- FICO credit scores of 720+
- Cash credit cards (MC/VISA/Discover/Amex) with at least $5K-$20K or higher
- Revolving credit usage below 30%
- Limit the number of credit cards with balances- less than ½ is best (this includes store cards)
- The longer the credit history the better (10+ years)
- No recent credit issues – no late payments showing in past 2+ years (never is even better)
- No open collections, no public records- tax liens, etc.
- No bankruptcies
- No short sales, modifications, or debt consolidation
- Mortgages and auto loans at least 2 years old (best if have at least one of these in past 5 years)
- Limited credit inquiries (no more than 2 per agency in the past 12 months)
- No open disputes on credit issues
Again, this describes the ideal candidate to obtain $100,000 or more. Many people don’t have perfect credit profiles. The good news is that they could qualify for a lower amount up to $100,000. Keep in mind that multiple guarantors can be used to achieve higher lines of credit. Your potential credit partners can check their credit at www.annualcreditreport.com (available every 12 months for free).
Compound Profit of Arizona provides business financing and other services for established and start-up companies, to include those not able to access traditional lending options. We want to help you grow your business. We are locally owned and operated in Tucson, AZ, but nationally connected. Give us a call at 520-909-7146. You can also complete our business analysis review form and let us see if we can be of assistance.
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