Guest post by Shannon Suetos (learn more about Shannon at the end of this post)
Being able to budget your money is key for a new business owner—doing so can be the difference between being successful or not. Budgeting is even more important these days with the state of the economy. The U.S. Labor of Statistics has reported that the unemployment rate (as of December 2009 ) is 10% and 8.2% of the unemployed are women. Because more people are losing their jobs it is crucial to make sure you stay on top of your personal credit, as banks are making it harder to get business loans.
These high unemployment numbers makes it more difficult for business owners to stay in business, or even start a business as a result of people being thriftier with their money. Banks are no exception. It is harder today to get a loan than in many years, and banks are looking closer at your personal credit when deciding if you will get a business loan or not.
There is some hope against the banks and other business cash advance companies–at least in the near future. According to the FTC (Federal Trade Commission) in 2011 lenders will, “require a creditor to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer.” This will allow anyone to get a free report of their credit score and be able to review it before sending it to their lending company of choice. If you see you need some work on getting your credit score up, you can look to a debt management service to aid you in getting that loan you will need.
In mid-December Obama met with top bankers to discus the problem small business owners are facing when it comes to getting a loan. He pointed out America bailed out banks, so now its time for them to help small businesses, “I urged these institutions here today to go back and take a third and fourth look about how they are operating when it comes to small business and medium-sized business lending.”
Later that day, Bank of America promised to give $5 billion to small businesses in 2010. With the New Year upon us we will have to wait and see if Bank of America will be good on their promise. Until then, it is a good idea as an entrepreneur to get a hold of your credit report and seek a debt resolution program if necessary to get the loans you need to start your business and keep it growing.
About the Author
Shannon Suetos is a writer based in San Diego, California. She writes extensively for Resource Nation, an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs.