Loan guaranty: A promise to pay back a loan.
Loan guaranty commitments are important to follow through on for a business owner. This gives the owner and their business a reputation in the banking world as being able to pay off debt on time. It will improve the chances of future financing options. It can have an even greater positive affect on a business if they both pay back the loan and also the lender reports this positive payment history to the Small Business Financial Exchange.
By doing this a business can build business credit which is basically personal credit, but for a business. The business credit is used to increase financing possibilities, and most businesses that have good business credit will get their loan applications looked at even closer.
Another important thing to note is that when businesses are relying on personal credit to finance their business if anything goes wrong the owner’s personal assets are at risk, but if the financing was taken out in the name of the business, the owner would not be in such a terrible financial hardship, and have to give up their hard earned assets.
Our unique Business Finance Coach will take you by the hand and show you step-by-step the proper ways for your business to build the credit it needs. It also shows you the 20 most important things that lenders look for in a loan application. By missing just one of these things your business will get denied for financing.
Find lenders in our free business capital search engine today.