Business Credit
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What is business credit and do I actually need it? If you were to ask that question about five years ago I would have said not at all and don’t worry about what it is. today, the guidelines of owning and operating a successful business have changed. Access to capital has become tighter then ever and lending institutions are not willing to take any kind of risk whatsoever. because of this, it is important to start thinking about running your business the right way. Business credit is necessary if you are going to be seeking business financing or lines of credit.
It is vital that you start building your business credit in this new economy so your business has access to capital
When seeking business financing or a line of credit for your business, you must have a good business credit score with the three main business credit reporting agencies. The three main business credit reporting agencies are Dun & Bradstreet, Experian, and Equifax. Nexus Lexus is another business credit reporting agency that is up and coming that you should keep your eyes on.
When a lending institution pulls your business credit report, they can see all three of your business credit scores on one report. They call this the all new tri-merge report. The reason why lenders want to see all three scores is because each business credit reporting agency focuses on certain business information. For example, one agency might have more information on your bank accounts and whether or not you are in good standing, while another agency will have more information on your vendor trade lines. Banks and lending institutions are going to look at your business full circle before they approve you for a business loan or line of credit.
Creating a strong business credit asset will help you:
- Separate your personal credit from your business credit protecting your personal assets.
- Take advantage of all business opportunities that may come your way like valuable partnerships and affiliate programs.
- Express to potential buyers and investors that you have spent the time establishing a solid corporate foundation with access to capital in mind.
- Become approved for bank loans and lines of credit with no personal guarantee.
Here are a few more articles on business credit.
