Business Name Name Issues
A frequent cause for the denial of a loan is the inconsistency in the business name on the application as compared to the one officially registered in state records. It’s critical to ensure uniformity in the business name across all formal documents, certifications, and bank accounts. Moreover, having a business name associated with industries considered to be high-risk can be a red flag for lenders. Industries deemed high-risk often involve greater chances of employee injuries or operate primarily with cash, which can increase scrutiny. To circumvent potential issues, it’s recommended to refrain from using a name that directly indicates involvement in a high-risk sector when applying for loans.
When dealing with an aged shelf company, it’s advisable not to alter its original name. Instead, you should file for a Doing-Business-As (DBA) designation, which allows the business to operate under a different name without changing the legal name of the company.
