Building Business Credit

Building Business Credit

Building Business Credit - Most businesses want to be able to borrow money when they need it, without the owners having to guarantee the loans personally. This means less risk to the owners. But wanting to get credit for your business and actually getting it can be two different things.

Building your business credit will improve your business with the following:

  • You will save time and money for your business

  • Meet any current lending needs

  • Prepare for any future lending needs

  • Have cash in your business when it's needed instead of after

  • Ability to extend your cash flow at the current time

  • Lower your interest rates on all outstanding debt present and future

  • Build credibility for your business

You may have seen material about how a business credit profile can overcome a bad personal credit file. In most cases, however, it's important that small businesses have both good business credit, as well as good personal credit on the part of each owner. This is true in the current environment where investors and venture capitalists aren't handing money out to just anyone who can breathe and has a good business plan. Even established businesses will find it necessary in some cases to provide the business owner's personal guarantees on some loans or credit cards.

Building business credit is different from building personal credit, though your personal credit may be linked in some ways. For example, some credit reporting agencies sell business credit scores that is based on both the risk of the business and the personal credit of the owner of the company.

Building Your Business Credit

The biggest advantage of having a good business credit profile is saving money. By obtaining a more favorable credit score you will lower the interest you pay on loans and leases to all your debtors.

Building Business Credit