In the current economic situation, having good credit is a key factor in the ability to expand your small business. But did you know that not only is your personal credit important, your business credit is critical to your success as well? Now more than ever it is imperative for owners to demonstrate strength not only in their individual credit score, but through their business credit history as well. Showing lenders a solid history of timely payments on existing loans, while demonstrating a profitable bottom line, will increase your chances of securing a loan.
“Good business credit allows right of entry to capital, which is extremely important,” says Scott Kelley, SVP of Commercial Credit with HCC. “A big challenge we see with our small business clientele is in sustaining their operating costs when orders aren’t flowing as fast during off months. Good credit allows the owner to weather uncertainties and access cash during these downtimes.”
Just like your personal credit bureau, business credit is observed and reported on by credit ranking agencies. The most well known institution reporting business credit is Dun and Bradstreet, although there are now several companies that provide similar evaluation services. Each agency reports on your business credit a bit differently utilizing their own proprietary methods. This could revolve around incorporating data from your vendor trade lines or perhaps compiling information from your bank accounts. A higher score represents healthier financial performance indicating you are making prompt payments to your suppliers. Lenders typically review all published business scores on a singular report which aids them in extending financing terms to your company.
Business credit is essential for expanding your business and is the basic foundation on which success is built. Harbour Capital recommends to its customers that they consistently check their credit report to ensure its accuracy. Make sure to dispute any inaccuracies immediately with the agency reporting them. After all, your businesses reputation could be at stake.
At Harbour Capital we are committed to understanding your individual business needs. Please contact one of our team members today to get more information on how to enhance your company’s credit and to discuss our many financing options. We are here to help grow your business!
Nick Careno – HCC Blogger