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At first glance, unsecured business loans can sound like a big risk. Whereas secured business loans are taken against a borrower's assets, unsecured business loans require no collateral. Because the lender takes on greater risk, unsecured loans often feature higher interest rates than secured ones do.

Also known as credit score, Fair Isaac Company (FICO) scoring is a formula for credit risk assessment that is believed to be highly predictive of future payment risk. The borrower's score is derived by weighing credit information at a snapshot in time and assessing "points" for each piece of information. The information is taken from a credit bureau file and scores are based on credit information only. The borrower's score is calculated based on assigned numerical values for certain credit characteristics. The higher the overall score, the less risk there is for the lender. High risk characteristics include bankruptcy, non-bankruptcy derogatory public record, charge-offs or loans defaults, repossessions, serious delinquency. Other weighted characteristics are number and age of trade lines, presence of derogatory trade line information, current level of indebtedness, types of credit available (revolving vs. installment), amount of time credit has been in use, credit inquiries.

Entrepreneurship can be an amazing way of life, but it is not perfect. It can be a dream come true, but there can be many nightmares before the real dream becomes a reality. The article contains some things that should be considered by all before taking the leap into the choppy waters of the entrepreneurial sea.

Credit rating agencies are meant to provide credit reports, credit scores and credit history of your business. Credit rating agencise gauge the credit health of your business based on the usage of credit, your ability to repay, your repayment behaviour etc. The higher is the credit score, the better is for the business to get loans from the lenders. Various lenders look at the credit score from the creidt agencies to determine whether to provide a loan or not.