How Your Personal Credit Affects Your Business Credit

Mar 27, 2017

If you’re looking for business financing, you might be interested whether your personal credit affects your business credit. The good news is that bad credit doesn’t mean the end of the world: you can still qualify for a business loan with poor credit.

The Importance of Credit Scores

If you’ve decided to turn to a traditional bank or financial institution, your credit scores will play an important role in whether you’ll be approved for a loan or not.

It’s important to note that each lender has its own specific requirements. Credit scores are the reflection of how well you manage your finances. So, if you have low credit scores, this will indicate you don’t possess the proper skills to handle your money. However, not all lenders will stay away from you because of your poor credit.

No matter you’re going to apply for a business loan or any other type of lending, your personal credit scores will have the same impact. If you have less than 660 scores, you’ll have difficulty getting approved for a loan with a traditional bank or financial institution. With 720 or higher, you’ll be in a better situation.

Traditional Vs Alternative Lenders

If you have bad credit, turning to a traditional bank or lender will most probably disappoint you. You’d better try alternative lending options, which has become so much popular in the recent years.

If you need access to working capital, such as a revenue-based loan or a merchant cash advance, consider turning to a reputable alternative lender like EMB will offer you programs regardless of your merchant account bad credit, or your type of business. EMB is voted the #1 high risk payment processor in the US and offers services such as:

  • ACH Business Funding

No merchant account is required. You’ll get financing based on the gross deposits in your checking account over a 4-month period.

  • Cash Advance Program

This is EMB’s most popular program. You can get funding in as little as 5-7 days.

How Personal Credit Affects Business Credit and Financing

When considering a business loan, note that, in the case of business revenue loans, your personal credit is going to affect the approval amount and not necessarily the approval itself.

Below you can read what can’t be on the credit report for any type of financing:

  • Any bankruptcy that has not seasoned at least 6 months
  • Unpaid tax liens
  • A felony

Financial fraud, no matter when it occurred, will be a major problem with any lender.

Alternative lenders won’t look at debt ratios, tax returns, profit and loss statements, and balance sheets: they will look at your cash flow. Given different lenders have different requirements, it’s important to prepare a solid business plan before applying for a loan.

As you see, applying to a traditional bank or lender will require you to have perfect credit. However, if you choose to turn to an alternative lender like EMB, you’ll be able to get approved for a loan even with bad credit.


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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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