What is Business Fundability
Business fundability is a measure of the possibility that your business can obtain business loans or other types of business funds. It measures the financial health of your company and all business owners could use that information. Some think that business fundability is the same thing as a business credit score. It is not the same thing as your business credit score or credit rating. Your business credit rating is only a part of the assessment of your business fundability assessment. A business fundability assessment provides a business owner with a scorecard report which is an evaluation of your business.
How did the Concept of Business Fundability Come About?
In March, 2012, a press release issued by CredSystems, a company that has offered business credit coaching systems and a nationwide business loan funding advisor network for the last five years, announced Business Fundability as a product they are offering. The CMO of the company states that the product is in response to the high small business failure rate due to poor financial planning and performance. All too often, small business owners tap their personal funds to start their businesses and end up losing their retirement nest eggs and life savings and then lose their businesses because they don't know how to obtain the proper financing for their businesses.
Business Fundability, the product, collaborates with Experian, the credit reporting agency, along with a network of advisors across the U.S. in order to help small businesses learn to apply for commercial business loans.
The Basic Components of Business Fundability
Business credit is one component is business fundability. Establishing your business credit does not happen over night, but it is an important component of business fundability.
Your business identify is one of the first things you do when establishing a business and is another factor in business fundability. Business identity occurs when you establish your form of business organization, register your business name and address and when you establish your business bank account.
Your bank rating is crucial to business fundability. If you have established a relationship with a bank, you must have a stellar payment record and adequate deposits that you could use as a compensating balance for a loan.
Complying with legal requirements is another component of business fundability. Your company must meet state, county, and city regulations and any licensing requirements relevant to your type of business.
If you think you meet these tests, you can fill out an application to be examined for business fundability by one of the advisors that exist across the U.S. The Association of Small Business Development Centers offers a business fundability test and counseling for small business owners on their website.