Financial Health

Improving your debt-to-income ratio (DTI) before applying for a business loan or other type of financing reduces the risk of underwriting delays or being denied because of your finances. Consumer and business lenders have their own requirements for what makes a “good” DTI, but common ranges include:  Low-risk DTI being under 36%  Medium-risk DTI at levels between… Read more »

A credit utilization ratio (CUR) is the total amount of revolving credit that you are using (your revolving debt) divided by the total amount of revolving credit that is available to you including credit cards, lines of credit, HELOCs, and more. A CUR can apply to both personal and business financing and is calculated using the following… Read more »

Creditworthy is a term used by lenders to evaluate the risk level associated with a person or a business applying for financing. Being more creditworthy means there is less of a risk of defaulting on the borrowed amount or that the lender has less risk in recovering their losses.   Creditworthiness is for both personal and business borrowing… Read more »

Capital expenditures (CapEx) are purchases of long-term assets like new vehicles or manufacturing equipment while working capital is the cash a business has on hand to cover daily operations. Working capital is calculated as the difference between a business’s short-term current assets and current liabilities.   Both CapEx and working capital are essential for business growth, but they serve different purposes. CapEx involves cash outflow… Read more »