The Benefits of a Good Business Credit Score
If you own a small business -- or any size business, for that matter -- a good business credit score could very well be your lifeline in these continuing tough times.
First and foremost, good business credit can save you quite a bit of money. If you have good credit, lenders will offer you better interest rates, and that means you spend less.
A high business credit score also means you can get credit without providing a personal guarantee. This can significantly reduce your personal liability and protect your personal assets, which are valuable benefits in any economy.
Good business credit can help you make your business more competitive. With the interest it helps you to save, you’ll likely be able to undercut your competitors’ prices and/or keep a larger share of your profit for yourself. What’s more, it can make getting a mortgage or a car loan easier for your business: In other words, you can expand your business faster and more cost-effectively.
Good business credit offers you peace of mind. It helps you secure the funding you need when you need it, so you’re able to make critical business decisions and put them into play more quickly. That means you can do what you feel is necessary to solidify or grow your business when you want to, without having to worry about being able to pay for it. This will put less stress on you as the business owner, which will likely translate to a less stressful work environment for all of your employees.
Your business credit rating is the leading indicator of how well or how poorly you manage your financial matters. Lenders and prospective clients alike will look at your score to obtain information about your business. There are plenty of credit bureaus out there selling it to them.
You cannot consider a good credit rating a luxury anymore. In today’s highly competitive world, it is a necessity that offers you the following.
- More available cash with which to sustain and/or grow your business
- More purchasing power
- More convenience in securing funds
- Protection of your personal assets if your business incurs substantial liabilities or fails
- Preparation for your business’s future borrowing needs
Without good business credit, growing a small business can be challenging, to say the least. With it, you have a much better chance of going as far as your entrepreneurial drive will take you.
