Good credit history is an integral part of your business loan application. It indicates to the lender how reliable you are. The following aspects of your credit history are considered when availing of a business loan. 

Aspects of Credit History that Impacts Business Loan Approval

• Defaults in Repayment 

It is always good to make timely EMI payments. Even after the deadline, you will be given a few days to make the instalment. Missing this deadline as well is sure to take a hit on your credit history. If your debt repayment is consistently late or missing, then it heavily impacts your chances of availing of a business loan. Even if a business owner does get a loan after this, the business loan interest rate would likely be higher than average. 

• Bankruptcy 

If you have ever filed for bankruptcy, your chances of availing of a business loan are slim to none. It is bound to reflect poorly on your credit history for a minimum of 10 years.

• Debt to Income Ratio (DTI)

DTI is the percentage of disposable income going towards debt repayment. A DTI higher than 50% makes loan application acceptance less likely. Especially since a majority are unsecured business loans, the lender becomes even warier. 

Business loans can play a massive role in the success of your business. However, availing it is only possible if you are deemed a worthy borrower by the lender. Fullerton India’s business loans are here to help you through flexible repayment tenures and competitive interest rates so that you can expand your business!

Must Read: How We Can Get an Unsecured Business Loan?