Through the ups and downs of the U.S. economy in the last few years, lending practices have changed across the board as investors have become far more particular about who they loan money too. One positive trend has been seen in small businesses, as more and more small business owners obtain carefully planned loans in order to grow their companies.
Small business owners have continued to gradually prove their worth to investors, making a reputation for themselves as promising and credible ventures. Learning to borrow while keeping their priorities and plans in mind has led to skills in building credit without becoming too entrenched in debt.
Here are 4 strategies for you to begin building your business’ credit the smart way:
1. Explore Your Options
Thoroughly research every type of business financing that is available because there are a lot out there. Be sure to choose the financing that best fits your unique situation, and think carefully, as the wrong choice could adversely affect your company’s financial status and have a negative impact on your credit history.
2. Keep Business Credit Apart From Personal
Your small business should have all its own accounts, particularly when it comes to credit. Separating the two protects both and allows your business to establish credit in its own right as an addition to its professional standing.
3. Treat Your Credit as an Asset
Don’t take anything about your credit for granted. Good credit must be earned and protected as an asset, so make payments on time and keep low balances when possible. Accounts managed well over long periods of time will result in high credit scores, helping you qualify later for better and better business financing.
4. Manage Your Debt
Use the money you borrow as you would money coming directly out of your funds, making wise spending choices that will increase revenue in one way or another. Pay the money back on time rather than keeping high balances to best improve upon your credit and keep your company in the black.
As an entrepreneur, capital can be more elusive to keep and control than actual company worth. Tactical loans or small business lines of credit can stretch a company’s resources further and make the most of incoming and outgoing revenue.
Advance Funds Network has been one of the easiest and most successful ways to obtain business financing since its beginning in 2007. By working closely with small-to-medium-sized businesses to learn about their enterprises, we are able to provide multiple funding options to fit each unique scenario. Our flexible financing helps even those with bad credit to build their businesses however they wish, while improving their credit scores through business lines of credit or cash advances. Fast and reliable, AFN works to pre-approve businesses within minutes, delivering cash in mere hours. We believe investing in America’s businesses is a step toward helping good things happen for the whole economy.