Getting Business Credit

Business Loan and Grants

Getting Business Credit

Whether you're planning to start your own business or expand the one you own, you may be in the market for credit. When you shop for a loan or line of credit, remember that the law protects you against discrimination. The Equal Credit Opportunity Act (ECOA) prohibits creditors from denying you a loan based on reasons that have nothing to do with your credit-worthiness.

The Federal Trade Commission wants you to know that:

• You cannot be denied business credit on the basis of your race, color, religion, national origin, sex, marital status, or age - or that of your customers. For example, if you request a loan to open a store, a creditor can't deny your application based on your race or your customers'.
• If your application for business credit is rejected, you can find out why. You must submit a written request for the reasons within 60 days of the denial. The creditor must give you the specific reasons - in writing - within 30 days of your request. If you don't agree with the reasons, consider discussing your concerns with the lender; you may be able to resolve the issues.
• If your business is small (less than $1 million in gross revenues), the lender must keep records of your credit application for one year after telling you of the credit decision. If your business grosses more than $1 million, the lender has to keep your records on file for only 60 days after denying you credit. If you ask that your records be kept longer, however, or if you ask for a written statement of the reasons for denial, the lender must keep your file for a year. If you don't ask about the reasons for denial within 60 days, the law permits the creditor to destroy your records. Note that these records could be important for any legal action you may consider against a lender.

You have the right to sue a creditor who doesn't comply with the law. If you have a complaint about a government lender, public utility company, small loan and finance company, travel and expense credit card company, or other non-bank creditor, you may want to file a complaint with the FTC.

Credit, Loans & Leases

Facts For Business

• Advertising Consumer Leases [PDF]

  Answers frequently asked questions about the advertising requirements of the Consumer Leasing Act and Regulation M.

• Businesses Must Provide Victims and Law Enforcement with Transaction Records Relating to Identity Theft [PDF]
• Complying with the Credit Practices Rule

  Explains who must comply with the Credit Practices Rule, how to comply, and what transactions are covered.

• How to Write Readable Credit Forms

  This manual is intended to help you write consumer credit contracts and other forms in "Plain English" so that your customers can easily understand them.

Business Alerts

• Getting Business Credit [PDF]

  Outlines your rights, as a businessperson, under the Equal Credit Opportunity Act.

• New ‘Red Flag’ Requirements for Financial Institutions and Creditors Will Help Fight Identity Theft [PDF]
  

  Learn about regulations (the Red Flags Rules) requiring financial institutions and creditors to develop and implement written identity theft prevention programs. 8.5"x11", 2 pages.

• Slip Showing? Federal Law Requires All Businesses to Truncate Credit Card Information on Receipts [PDF]

Legal Resources

• Guidance Documents: Credit

  Includes rules and acts.

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