How do personal loans affect your ability to get a business loan?

Dominick Wallace of Wallace Capital Funding, LLC is a member of XPX Atlanta
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Learn what lenders use to decide whether or not you will qualify for a business loan

Have you ever applied for a business loan and got rejected and wondered why?

Well, your personal loans could be the problem. 

It’s a common misconception that personal credit and business credit are separate but that is not always true.

That was the case for one Wallace Capital Funding LLC client, who after the Business Funding Analysis with us, decided to take out a personal loan and ruined their ability to get the business loan.

This is because the personal loan messed up a specific ratio banks and other lending establishments depend on to qualify borrowers.

The ratio is called Global Debt Service Coverage Ratio or GDSCR. It compares your personal and business income to your personal and business debt. A composite score of the two amounts will show if you qualify or not. Stay tuned for our next article, which will explain the ratio in detail. 

With this in mind, it is important that both your personal and business credit scores don’t fall too low or else you don’t qualify, which is what happened to this client. 

But what does this mean?

In simple terms — if you have a really high business credit score and your personal credit score is average, it will be easier to qualify.

But if you have a really good personal credit score and low (or even no) business credit score, it will be much harder to get the loan. 

With the help of Wallace Capital Funding, LLC, we can make sure both your business and person credit profiles are in tip-top shape before applying for loans. Work with our experts today to get the process started. 

The GDSCR, getting financed and more will be discussed during a webinar presentation hosted by Wallace Capital Funding’s Managing Director Dominick Wallace. Join WCF’s mailing list, which can be found on our website, to get invited and learn more.

For all of your business financing needs, Wallace Capital Funding, LLC can help. Whether you need funding for new equipment, financing commercial real estate, or to cover staff expenses before your contract payment comes through, Wallace Capital Funding, LLC can create a custom funding solution that’s right for you.

Updated: April 15th, 2022

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