Business financing and credit checks

The principle

A lender may assess business credit, an owner’s personal credit, or both, depending on the product and guarantee structure. Providers use different information sources and decision processes. The words prequalified, preapproved, and eligible do not by themselves explain whether a credit inquiry has occurred or a final decision has been made.

Put it into practice

Before authorizing access, ask which person or entity will be checked, which provider will perform the inquiry, and whether the inquiry is described as soft or hard. Ask how that distinction applies to the relevant credit file and jurisdiction. Review your records for errors and resolve inconsistencies in names, addresses, and obligations.

What people often miss

Do not rely on an unspecified promise that a quote cannot affect credit. Multiple parties may be involved when a marketplace distributes a request. Read the actual consent and sharing language and keep a copy. Reading the Capital Files and completing learning checks do not authorize a credit inquiry.

Your next-step checklist

• Business and personal files involved
• Inquiry type and performing organization
• Consent wording and intended recipients
• Accurate records and documented corrections