Good Business Credit Can Make a Big Difference
Running a business will usually require acquiring capital, and a good business credit score may just be your only ticket to securing that financing and achieving your business goals. Lenders need to be assured that they’re taking a worthwhile risk by lending to your business. They want to know that you’re not likely to default on your loan, and that they’re making a relatively safe investment in your company. This is where your business credit score comes into play.
You’ll Have a Safety Net
If you ever find your business strapped for cash, your business credit history could save you. Having a good business credit score demonstrates your business’s capabilities and credibility. It shows that you’re able to pay your debts when they’re due, and lenders will be more likely to view you as a good candidate for their finance products. Your business will be able to qualify for more capital at lower interest rates, and you probably won’t be required to put down nearly as much collateral – which frees up the cash you do have on-hand to be used for other projects or business needs.
You Get to Keep Your Personal Credit Separate
Establishing good business credit will prevent you from ever having to rely on your own personal credit to apply for a business loan. Your personal finances will be better protected if you don’t have to provide a personal guarantee to qualify.
It Opens the Door to More Business and Potential Partnerships
If you find that your business isn’t in the market for a loan, it doesn’t mean you can throw caution to the wind. Many companies tend to be conservative in their business decisions, and will openly state that they prefer to work with other companies that have good business credit. This metric demonstrates how risky you are in other areas of business – something a potential customer or even partner may not want to become involved with.