If you run a construction business, you might be forgiven for thinking that at times it’s bloody hard to get credit!
And there’s a couple of different reasons for that.
Lots of different lenders will actually risk grade different Industries. One industry they risk grade, of course, is residential builders. Even when lenders look at a business owner engaging in commercial construction and residential construction they will regard that business as being in residential construction. So you can get pushed into a category even if you’ve got a large amount of revenue coming from other sources such as commercial fit-outs.
Why is this important to my business loan application?
It’s important to know lenders risk grade different industries and even exclude some industries as you could get declined purely because you didn’t know your chosen lender isn’t interested in working with resi builders. Presumably you’ll seek finance in the future but that declined credit application will be noted on your credit file and can lower your credit score – both of these can negatively impact your chances of getting credit in the future.
What should I do before applying for a business loan?
You want to be sure before making an application, or a finance expert is making an application on your behalf, that you already know and the expert knows your chosen lender supports resi construction businesses and builders of all types.
By knowing that lenders have preferred industries you can apply to the right lender the first time. In doing so you’ll more likely have the outcome you’re looking for and not negatively impact your credit file.
Related Links
Selecting the right business loan for your business
How to get financed approved for a residential development
