| A GOOD BUSINESS CREDIT PROFILE CAN HELP TO GROW YOUR BUSINESS
Your business credit profile is like your business 'Curriculum Vitae'; it contains critical information that other businesses use when deciding whether, and on what terms, to do business with you.
Like a personal Curriculum Vitae you use to obtain employment, it's important that the information in your profile is accurate, complete and timely. No one knows your business better than you. You might have a thriving and profitable business, but when doing business with others, often what matters more is what is documented in the credit report they receive on you. Most companies want a complete
and unbiased view of your Company (and how risky it might be to trade with your Company). The business credit scores and reports give companies, that want to do business with you a fast, objective measurement of your credit risk.
You should think about your business credit profile in terms of:
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What is in your credit profile?
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What is it telling other companies about your business?
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How do your current business credit scores affect the interest you pay on your existing loans?
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Did you get the best terms?
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Have your scores improved enough to consider refinancing, or extending your credit lines?
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Do new suppliers extend to your company favourable credit terms or ask you to pay Cash on Delivery (COD)?
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Are your competitors getting better terms for the same items?
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Have you lost a deal because your competitor had better credit?
If your answer to any of the above questions is "I don't know," your business credit profile may not be working to your advantage — it may actually be costing you money.
Benefits of have Good Business Credit Profile
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.
Not sure where to begin in building your business credit profile? The knowledgeable experts at WWCB2B.COM can advise you on the different factors that affect credit and help you determine what you need to do.
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