Good Credit Increases Your Working Capital
Good business credit allows you to procure larger loan amounts because banks see your business as financially stable and low-risk. You can win new customers who feel secure that you are able to meet your commitments with them. And you can attract potential investors who feel confident about your business’s potential for future success.
Good Credit Decreases Your Expenses
Good business credit gets lower interest rates on loans and lower premiums on insurance. You can negotiate better credit terms with your suppliers so you can pay them later and keep cash on hand to run your business. In addition, you can bargain for better lease rates on space or equipment, and lower your cost of doing business.
Don’t Overlook the Importance of Business Credit
When a company wants to perform a business credit investigation on your business, they request it from in the form of a business credit report, an integrated view of a company’s operations and finances. Credit managers and analysts use these reports to learn about your business credit and creditworthiness, so it is essential that you have one. Without reporting information, they may not be able to locate and, therefore, properly assess your business.
Make Sure You Pay Your Bills on Time
Credit companies use statistical models to develop a business’s scores and ratings. The most significant contributing factor to that rating is the promptness with which you pay your bills. Mathematical methodology creates a score that shows, on average, how many days beyond terms you pay or whether you pay within terms. This information is factored into almost every score or rating. The more prompt the payment history, the better your business credit scores and ratings will be.
Good Credit Affects More Than Just Financing
Good Business Credit is not just about getting access to financing; business credit has increasingly become the primary vehicle for setting terms on business loans, determining insurance premiums, even setting lease payments. Good business credit can earn you lower rates and strengthen your cash flow.