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Lesson Summary


Your business bank account rating is a reflection of your funding ability and plays a role in the size of the loan or a line of credit your business has the ability to repay.

Your business bank account reflects the strength of your company’s revenue and how you manage its cash flow. Lenders want to know that your business cash flow is capable of handling the business debt and expenses on a consistent basis. Bank accounts with low average daily balances, or that show many NSF returned checks, can get your business loan application declined.

Your “Bank Rating” is based on your average daily minimum balance over the last 90 days.

Bank Rating Account Balance

Low 4 $1,000-$3,999

Mid 4 $4,000-$6,999

High 4 $7,000-$9,999

Low 5 $10,000-$39,999

Mid 5 $40,000-$69,999

High 5 $70,000-$99,999

Bank Ratings Consist of 3 Parts

1. Balance Rating –  This rating is your average minimum balance maintained in your account over a three (3) month period. A $10,000 balance will rate as a “Low 5”, $5,000 rates as “Mid 4”, $999 rates as “High 3”, and so on. You need to maintain a minimum “Low 5” bank rating ($10,000) for at least 3 months. Unfortunately, without at least a “Low 5” rating, most lenders will assume your business has little ability to repay.

2. Bank Rating Cycle – The second part is the bank rating cycle which is three (3) months. You’ll want to have at least a “Low 5” rating for the three months prior to applying for a traditional loan.

3. NSF History – The third and final part has to do with how you manage the account. NSF (nonsufficient funds) checks destroy bank ratings. From this point forward, NSF checks are something you cannot allow so be sure to add overdraft protection as soon as possible.

As long as you keep this in mind, you’ll be able to maximize your business credit and loan approvals in the future.