A strong business credit profile determines the number of risk suppliers are willing to take to assist you in growing a successful company. In order to get yourself started, you must register for a business license, incorporate your company, acquire an Employer ID number from the IRS, open a business bank account, and keep your personal finances separate at all times.
Request Business Credit Reports
TransUnion, Experian, and Equifax handle business credit reporting for over 27 million businesses in the US. If you’re listed in the appropriate sections, you may have a report available now. Acquire the report to see what your current standing is before you attempt to apply for business credit lines or ask for a supplier to extend credit terms.
Each credit bureau reports different aspects of your report, but the basic structure includes:
– Business Name
– Address
– SIC Code
– Creditors
– Length of Credit History
– Rating
– Score
An example of a credit report from Experian is available here (https://www.experian.com/small-business/business-reports.jsp). What’s in your business profile? After you find out what others can see, you can take the appropriate steps to make it better.
Correct Inaccuracies
Review all three of your credit reports for inaccuracies then proceed with disputes, if applicable. Understand that the process can take up to 45 days and it can improve your scores before you approach suppliers for credit lines.
Ask Suppliers to Extend Credit Terms
Based on your score, you can move into the next phase by asking suppliers to extend credit terms. An extremely high-risk business is ranked low, which is near 0 while low-risk businesses are near 100. Anyone in-between may have an active report, but it can change with the right steps. Suppliers are skeptical when it comes time to extend credit to new businesses so if you start with a strong score, keep it as you build your business.
Apply for Business Loans
Strong business credit profiles have long histories of positive credit lines. This may include business loans taken from reputable lenders such as Advanced Funds Network. They’re open to helping small businesses get started onto the path of growth. With easy application processes, you will be on your way to growth potential in no time.
A few questions you can ask lenders includes:
– What are my interest rates?
– What is my loan term?
– Will I need collateral?
– Do you offer insurance on my loans?
– Do you report my payment history to the credit bureaus?
Once you acquire a business loan, use the money to manage the growth of your business. Your ability to manage the cash you’ve received from a lender can create opportunities for growth.
Use Smart Cash Flow Management
Savvy borrowers pay their bills on time, all the time. It’s an obvious responsibility as a business owner and it creates synergy with your suppliers. On-time payments can give future investors a level of confidence in your ability to run a successful business, manage financial responsibilities and earn a profit within the same scope.
If you can show signs of profits, reinvest the money into your business as it continues to grow. Lenders are available for short-term loans to handle emergencies including natural disasters, unexpected opportunities, new hire expenses and equipment leasing.
Growth Hack Your Business
Stay focused on the end result of your investments, but monitor your credit reports as you make new financial decisions. Any changes to your credit report can deter others from offering you favorable credit terms.
We know you’ll have investors and equity partners. Anyone that sees a strong business credit profile will want to assist you as you continue your journey of entrepreneurship.
We’re your strategic partner. Advanced Funds Network can help you get started on your journey with just a few questions to see if you’re ready. Contact us today for more information.
