Businesses need capital to grow. While business growth can prove very rewarding, it often places a strain on financial resources and sometimes calls for new capital injections by business owners.

Credit offers access to growth capital. When preparing a business for expansion credit, the amount and types should be carefully considered.

Follow these important credit planning steps prior to seeking expansion capital for your business:

STEP 1 – Define your sustainable growth levels

STEP 2 – Assess and upgrade your financial reporting systems

STEP 3 – Calculate healthy equity levels for your company

STEP 4 – Establish a financial management routine

STEP 5 – Assess your management capacity and project gap fulfillment costs

STEP 6 – Create a credit needs chart to support your expansion plan

STEP 7 – Implement your plan

STEP 8 – Review and readjust your plan as needed

Just because your loan is denied does not mean that your company cannot obtain credit. It simply means that you have encountered a credit obstacle and need to overcome it. Overcoming credit obstacles takes work, but it can be done.

Here’s how:

Find out why – Contact your lender and request an explanation of the reasons for the denial in writing.

Review your Pillars – Review the reasons for denial and compare them to the 8 Pillars of Performance outlined in the Healthy Credit Practices℠ program.

Develop a Credit Plan – Examine your credit needs with the Healthy Credit Practices℠ Credit Match Tool and confirm that you are seeking the right type of credit for your business.

Get help – Contact us for a Healthy Credit Check-up. Or, you can find a local non-profit consultant or a Healthy Credit Practices℠ Assistance Provider who can help you outline a plan to overcome your credit barriers

Accessing business credit is among the top challenges faced by small businesses.

We surveyed small business owners and lenders to identify the most common capital access and credit obstacles. They are:

• Lack of knowledge about business credit

• Lack of understanding of bank criteria

• Limited understanding of the commercial credit process

• Insufficient or no business credit history

• Co-mingling of business and personal credit

• Poor personal credit behavior / payment pattern

• Insufficient business equity

• Insufficient cashflow / debt service ability

• Inadequate industry management experience

• Lack of business collateral

• Unclear or ineligible use of funds

• Inadequate / incorrect financial reports

Click here to download our Credit Obstacles Survey Report.

The Healthy Credit Practices℠ program is designed to help small businesses overcome these credit obstacles. To request assistance, go to our Credit Assistance Center.

Click here to take our online Credit Obstacles Survey.