How to Get Approved for a Business Loan in 2023: Building Business Credit and Legitimizing Your Business

As a business owner, obtaining a business loan can be critical to your success, but it can be challenging to navigate the lending landscape. In this article, we'll explore how to get approved for a business loan in 2022, focusing on the importance of building business credit and legitimizing your business. By following these steps, you can increase your chances of securing the funding you need to grow your business.

Building Business Credit

One of the most critical steps in getting approved for a business loan is building business credit. Business credit is a history of a business's trade lines and accounts that lenders use to evaluate risk. Unlike personal credit, business credit is not private, and there are no laws that govern it. To build business credit, start by ensuring that your business is properly set up, including an incorporated state, an EIN number, a business email address, domain, phone number, and actual address. Then, open a merchant account and a checking account, which allows lenders to verify the business income based on deposits in the checking account or merchant processing statements. Companies like PayPal, Square, and Cabbage extend up to $500,000 in business loans and do not require a personal guarantee, making it critical for entrepreneurs to start building their business credit to get access to capital.

Legitimizing Your Business

In addition to building business credit, it's important to legitimize your business. Obtaining a DUNS number can help legitimize the business and allow it to be reported to the three major credit bureaus. It's also essential to manage debt properly, as business credit is calculated differently, and managing debt properly can actually increase a business's credit score. Avoid using personal credit to fund the business, as this can negatively impact both personal and business credit. By assessing your situation, understanding the three types of lending concepts, ensuring compliance, and setting up the business correctly, you can position yourself for funding.

Conclusion:

Getting approved for a business loan can be a challenging process, but by focusing on building business credit and legitimizing your business, you can increase your chances of securing the funding you need to grow your business. By following the steps outlined in this article, you can build a strong foundation for your business and establish the creditworthiness necessary to secure the financing you need.

Invest in Yourself with Broker Solution's Career-Focused Courses

Are you ready to take control of your financial future? At Broker Solution, we offer three courses designed to help you achieve your goals. Our courses include the following:

• Broker Solutions Academy: In-depth training for those interested in becoming a business loan broker. We provide you with the tools and knowledge necessary to become a successful business loan broker, including access to industry professionals, comprehensive training materials, and ongoing support.
• Credit Consulting Academy: This comprehensive course is designed to teach you how to help yourself and others improve their credit scores. You'll learn how to analyze credit reports, identify areas for improvement, and implement strategies to help clients achieve their financial goals. In addition, you'll also learn how to fix your own credit and start your own credit consulting agency. This course provides you with the knowledge and tools necessary to help you achieve financial success while helping others do the same.
• Unsecured Business Lines Academy (DIY): This course is for those interested in securing unsecured business lines of credit on their own. You'll learn how to navigate the lending landscape and gain access to funding sources that can help you start or grow your business.

Our courses are designed to help you start a new career or improve your financial health. Join us and start building a better future. Contact Broker Solutions today!