Business credit scores play a big role in getting the financing you need to sustain and grow operations. From working capital to equipment to lines of credit and more, improving business credit scores opens the door to opportunities and benefits for entrepreneurs. To boost business credit scores, we have drawn up a simple strategy that can be used for both new and existing businesses.
1. Review your detailed business credit report
Entrepreneurs usually look over their business credit reports right before they apply for financing. In reality, you should review your business credit report on a monthly or quarterly basis. Credit reporting agencies are very large organizations which means errors sometimes occur. Balances that were paid off a while ago may still be showing up on your business credit report. The best approach is to look over your report regularly for discrepancies and contact the creditors in question. Any changes in your business credit report are usually reflected in the following month.
2. Pay down liabilities and debts
Once you have taken stock of any outstanding balances, it is time to pay off those liabilities before they get moved to collections. Additionally, look at balances for existing loans you may have taken out over the previous year. Debt consolidation and reducing unnecessary expenses can go a long way toward improving your business credit ratings, allowing you to access better financing programs.
3. Research your vendors and suppliers
There are many vendors and suppliers who offer special deals or financing options to business owners. However, not all vendors and suppliers submit information to credit reporting agencies. Before deciding to use a specific supplier, ask if they send reports to any reputable credit agencies. If you are making purchases for your business and paying off the balance on or ahead of the due date, then you should be reaping the benefits of increased business credit ratings. If your vendors and suppliers do not report that information, then you might want to find those who do. Being a good business client is one of the easiest ways to build business credit scores.
4. Finance with low or imperfect credit
While traditional lending channels rely heavily on business credit scores as a deciding factor when approving loans, there are several viable alternatives available to businesses that have low or imperfect credit ratings. Merchant cash advances offer an injection of working capital against a percentage of future sales without placing debt on the books or lowering your business credit score. Equipment leasing programs often have special programs for businesses with B, C, and D credit. Accounts receivable financing turns unpaid receivables to cash, which allows businesses to improve cash flow and pay down liabilities faster.
Start the New Year off Right
Web Finance Direct offers a wide range of financing alternatives for businesses that have low or less-than-perfect credit scores. We also help businesses with debt consolidation services. Contact Web Finance Direct today and build your business credit score for the new year.