What is Business Credit? Business credit is the ability of a business to qualify for financing. Businesses have credit reports and scores just like people do. Business credit bureaus Dun & Bradstreet, Experian, and Equifax all keep a record of debt payments and other credit information on businesses. Your business credit report may be used by lenders, creditors, suppliers, insurance companies and other organizations evaluating a credit or insurance application or business deal. These tips on how to establish business credit and then build a business credit profile can help you bring your plans and aspirations to fruition. Why Should I Learn How to Establish Business Credit? If you’re reading this, you already know that good credit (both consumer and business) is important for the future of your venture, but let’s explore the benefits a bit more. A strong business credit score can help you secure better interest rates on loans, decrease instances where you need to prepay for a specific product or service, and secure better trade terms with important suppliers in your industry. In the long run, this will help you save money, keep cash flow liquid, and access the funds or assets you need to help your business grow. Adversely, having bad business credit can limit your ability to secure financing. Additionally, a big issue with financing a business is dealing with personal guarantees. A personal guarantee is a promise from a business owner that they are responsible for their business’s debt should the business be unable to pay the debt. 86% of businesses use their owners’ personal credit to fund their entrepreneurial dreams, and establishing business credit can help you draw a clear and important line between your personal and business finances and mitigate the need to sign a personal guarantee for business funds. Now that you understand the importance of having good business credit, make establishing it and building your business credit a priority. Bake your credit-building strategies into your business plan and keep tabs on your credit report to ensure that your credit scores are soaring. We can offer help with building credit , establishing credit and getting different funding for your business. We a checklist to establish your business and get vendors to get started in building your credit for free.
Good Life Credit Pros 11501 Dublin Blvd., #200 Dublin, CA, 94568 (800) 974-9275