Step 21. Get Your First Bank Business Loan

This is what we’ve been working towards! If you have followed the steps from BizCredit Builder so far, you have put yourself in place for the first bank loan for your business. This loan must report on your business credit so it begins establishing your credit and demonstrates the business as credible.

Get the First Business Bank Loan

This might seem difficult, but if you have followed the steps so far, you should be in good shape for your first business bank loan. When applying for the loan, it should be in the exact name of your business, under the federal EIN that you established earlier. It should also report to all reporting agencies, especially Equifax Small Business and Experian Business.



  • To Do – Get Your First CD Business Loan

    If you’ve followed the steps, you have a much better chance at getting the business loan you want. Now is the time when you will secure a business loan with a certificate of deposit (CD) at your bank. You’ll make a deposit into a CD account at an SBA-recommended lending bank. After this step, you’ll receive a business loan that equals the CD deposit.

    This is effective because as long as your personal credit is decent (around 680) you will be able to get the CD business loan. The bank does not factor personal credit, but if the FICO scores is in the 500 range, which is considered bad credit, they may not offer the CD-based loan. If your score is low, it’s better to try small business banks and talk with an individual banker who can show you various options. Do you know where the deposit money will come from? $5,000 is all you need to start the deposit, and this can be obtained in many different ways. Consider using personal savings, selling a few expensive items, or hosting a garage sale to generate the funding for your CD-based loan.



  • Advantages of a Secured Bank

    Like a loan, everything will appear on your business credit report.
    You will not have a note in your file or your business credit reports that shows the loan is “secured.”
    Your business credit will stand out to other lenders. They know it’s hard to obtain a business loan and they will respect and appreciate your previous efforts.



  • A Helpful Suggestion

    It may be necessary to borrow money from friends and family to get this step started. However, they will have assurance that the money will be returned because:

    The money for the CD is borrowed to secure a bank loan.
    The bank gives you a dollar-for-dollar loan.
    You will deposit the money in a separate account and use it only to pay back the loan.
    When the final payment is made, you can return the loan with interest. Their money is in a CD, earning interest. This gives you a large boost for building your bank credit and business credit report.

    Not able to Get Funding Right Now?
    It is possible to continue through the credit-building steps without the secured bank business loan. In fact, some people feel this is a premature step for their business so they skip it altogether. Whether you want to pass on this step or can’t afford it, don’t worry; you can build business credit without the CD-secured loan. This step simply speeds up the credit-building process and could matter once you reach the final step. You can always return and work on this step when you are financially-secure, so let’s move on for now.

    Secured Business Loan To Build Up Your Business Credit  CLICK HERE

     

To Do List To Complete In This Step

1. Find a bank that offers Cd secured business loans.

2. Get a CD secured business loan.

Business Loan
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