| Getting new corporate credit depends on a | | | | reports contain all of the financial records of the |
| number of factors. They include the business | | | | company as well as a statement on their current |
| character of the corporation, the ability of the | | | | assets and liabilities. The bank will check these |
| corporation to repay any borrowed funds, the | | | | reports against the information provided by the |
| business and economic conditions in which the | | | | corporation before agreeing to a request for new |
| corporation is operating, and the general financial | | | | corporate credit. |
| health of the corporation. | | | | Another way that the financial institutions will |
| When a bank or other lending institution receives | | | | evaluate a request for new corporate credit is to |
| an application for new corporate credit they | | | | request the personal financial records and ratings |
| examine these factors with a fine tooth comb | | | | of the officers of the corporation. This will help |
| before granting the monies requested. They will | | | | them determine whether or not the personal |
| want to review the financial statements and | | | | integrity and character of the corporation as |
| records of the corporation for at least two years | | | | represented by the officers holds up to close |
| and they will perform a number of other checks | | | | scrutiny. This examination is usually quite thorough |
| to ensure that the information is accurate and up | | | | and may include checks on not only the finances |
| to date. | | | | of the individuals but may even include police, |
| One of those checks before approving new | | | | security and background checks to ensure that |
| corporate credit is likely to be a request for the | | | | the persons and corporation they are dealing with |
| corporation's Paydex Score. This rating is | | | | meet their standards. |
| prepared and distributed by Dun and Bradstreet, a | | | | Lending institutions may also do their own market |
| financial reporting agency, and measures how well | | | | research into the business and economic |
| a corporation is doing in paying its bills to suppliers | | | | conditions faced by the corporation before ageing |
| and vendors of their products and services. It is | | | | to new corporate credit. If the corporation is in a |
| seen by many in the business community as a | | | | rapidly expanding line of products or services that |
| good indicator of how well a corporation is doing | | | | is in great demand it will have a much better |
| financially and by the banks and other lending | | | | chance of success in getting new corporate credit |
| institutions as a measure of the financial health of | | | | than one whose market is stagnant or dormant. |
| the corporation. | | | | Even if a corporation meets all of these |
| A lending institution reviewing a request for new | | | | requirements they may still be asked to provide |
| corporate credit is almost certainly going to | | | | guarantees or collateral to back up their request |
| request a business credit report from one of the | | | | for new corporate credit. |
| major business credit information services. These | | | | |