Did you know that there’s an important difference between business and personal credit reports?
Unlike the information on your personal credit report, which can only be accessed by authorized individuals, business credit reports are available to anyone—including prospective investors, customers, partners or suppliers. Selecting a lender that reports to one of the major business credit bureaus, like Experian, Dun & Bradstreet, or Equifax, and making all payments as agreed will strengthen your business profile. It might also help you borrow at lower rates and get improved credit terms with suppliers.
Here are five small business lenders that report to the business credit bureaus.
Specializing in small business loans, alternative lender OnDeck offers a variety of lending options. Short-term loans of up to $250,000 are available for 3 to 12 months, perfect for financing smaller projects. Longer term loans come in terms ranging from 15 months to 36 months, and you can borrow up to $500,000. Or, keep things flexible with a business credit line of up to $100,000. In any case, OnDeck reports your payment credit history to business credit bureaus.
If you’ve been in business for at least 2 years, have $75,000 or more in annual sales, own at least 20% equity in your business, and keep fair or good credit with no recent liens or bankruptcies, Lending Club could be a good fit. Need-to-know information: loan or credit lines up to $300,000, no prepayment penalties, and your payments are reported to the business credit bureaus. However, make sure to watch out for origination fees that range from 0.99% to 6.99%.
International alternative lender Funding Circle has lent over $1.5 billion to business owners worldwide using funds from individual investors. Founded by small business owners, satisfied customers say the application process is fast and easy, and the cost is competitive. Read Funding Circle reviews here.
Fundation is an especially fast-working alternative lender. According to their website, loan proceeds from Fundation could hit your bank account in as little as three business days. Their conventional fixed-rate loans of up to four years can be paid off at any time without penalty, and they report your payment history to business credit bureaus.
For small businesses struggling with cash flow issues and earning at least $70,000 in annual revenue, BlueVine offers credit lines with advances based on your outstanding invoices. Your application takes just a few minutes, and you choose which invoices to submit. When you’re approved, BlueVine advances you 85% of the invoice amounts submitted, less their fee, plus an additional “rebate” amount when your client pays your invoice through your BlueVine account.
A healthy business credit report can help you get better rates and terms on borrowing and credit arrangements with suppliers, as well as raise your profile with customers and the business community.
However, choosing a lender that reports to the business credit bureaus is just one aspect of improving your business credit profile. To build strong business credit, also update and review your own business credit regularly, apply for trade credit with suppliers, and be sure to make all payments in full and on time.