When applying for a loan, most small business owners assume they will be evaluated only on the information they supplied on their application, but that’s not always the case. In fact, when applying for a loan from an online lender, that lender often takes into account things such as the social media profile of the business before making a decision. Lenders with a physical location take a look at Facebook, Yelp, and other social media sites to better check a business loan applicant.
Lenders are looking at these profiles to get a better idea of where a small business stands. For example, a business with thousands of Facebook followers has a ready audience for a new product or service. One with few followers may be more of a risk since it could show that the business has a small customer base. Some lenders may also look at the content an applicant is posting. Those who appear to be spending money on lavish office parties or other unnecessary activities may be less likely to be approved.
Another factor lenders are using more in their evaluation of a business applicant is its online reviews. Poor reviews may serve as a red flag to a lender and, if paired with other red flags about the business’s finances or credit history, may make the lender hesitant to extend credit.
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