In celebration of National Small Business Week and #DreamSmallBiz, the following blog was co-authored by Brian Ward, V.P of Marketing for Experian Business Information Services and Jonny Price, Senior Director for Kiva Zip.
For small businesses, sufficient access to financial resources can mean the difference between long-lasting success and a business that closes its doors within the first year. The problem is small businesses often have trouble obtaining financial capital. Whether it’s because they have a poor business credit history, or lack one altogether, many small businesses are challenged with the inability to find the right resources.
So the question remains, how can small businesses put their best foot forward to obtain financing from credit grantors?
First and foremost, small business owners and entrepreneurs need to establish a business credit profile. Many lenders rely on the information included in these reports to help them make lending decisions. In fact, an easy way for small business owners to start building business credit is through opening a business credit card account.
Furthermore, demonstrating an ability to repay a loan goes a long way. While there are many factors that go into a lending decision, a positive payment history can help improve a small business’s creditworthiness.
But what about the small business owner who is unable open a business account with a lender due to a lack of credit history?
These small business owners are in a unique position, because it can usually take business credit to get business credit. If there are no business accounts set up, it can be a bit challenging. In these circumstances, small business owners can open accounts with local supply stores, and ask them to report their positive business account information to commercial credit bureaus, like Experian.
Additionally, there are non-profit organizations, such as Kiva, who are committed to helping small business owners access financial capital, while also building and maintaining a positive business credit profile. Through our network of over a million lenders from around the world, small business owners who would not typically qualify for a conventional business loan, can access zero percent interest microloans to fund different aspects of their enterprise. Even though many of these borrowers have damaged credit, or no credit at all, they have an opportunity to access financing, as well as begin building and improving their business credit, ultimately opening the doors for them to qualify for more conventional business loans.
By helping underserved small businesses access funds and build their business credit profiles, we can enable them to succeed. Small businesses represent the heartbeat of our country, and in order for them to strengthen the economy overall, we must provide them the opportunities they need to take small business to the next level.
Brian Ward is Vice President for Experian’s Business Information Services. In his current role, Ward is responsible for the strategic direction of Experian’s small business products and services, as well as serves as the primary spokesperson regarding small business education. Additionally, he leads the development and execution of all marketing and lead generation campaigns and provides marketing support to the sales channel across the entire organization.
Jonny Price is a graduate of the University of Cambridge, where he majored in history. After six years at the management consulting firm Oliver Wyman, first in London and then in San Francisco, he joined Kiva in September 2011, to lead the Kiva U.S. program. Jonny is married to Ali, and lives in San Francisco.