Small businesses often struggle to make ends meet or to find funds to finance growth. Relying strictly on personal credit to finance your business isn’t the best strategy. Instead, a business credit score, which is based on your company’s financial track record, can open the door to some new opportunities. Learn how good credit benefits your business.
4 Ways Good Credit Benefits Your Business
Business credit scores generally range from 0-100, but different credit bureaus will have their own scoring models. These scores are based on your positive credit usage, time in business, and other factors. Here are four key ways good credit benefits your business.
1. Gain Access to Capital
As a small business owner, there will likely be times when you’ll need access to capital. For example, you may need funds to finance inventory or equipment purchases, hire new employees, or expand your business. Having good business credit can ensure you will be able to get business financing at affordable terms when the need arises.
2. Keep Personal and Business Finances Separate
Without business credit, you will probably have to rely more on your personal credit to finance your business. This makes it more challenging to track business expenses and can weaken any legal protections you might have as a business owner. When you keep your personal and business finances separate, this can protect your personal assets as well as give you access to more business financing options.
3. Secure Better Business Insurance Rates
Every business needs to have insurance to cover property losses and provide coverage for potential liability claims. Depending on your industry, you may require other coverage as well. Insurance companies will often look at your business credit score when assigning rates, meaning you can get more affordable premiums with good credit.
4. Boost Your Business’s Credibility
Not having business credit can impact your company’s credibility in the eyes of many interested parties. For example, potential vendors, business partners, customers, and investors might want to review your business credit before agreeing to do business with you. Having a strong credit score shows your business is able to meet its obligations and will be a trustworthy partner.
Get the Right Financing Solutions for Your Small Business
While good credit can benefit your business, you don’t have to have a spotless record to get access to the funds you need. CAB Capital specializes in helping small businesses achieve their goals, whether they do so through traditional lenders or asset-based lending (ABL), where you use your business’s assets as security with clearly-defined loan terms.
CAB Capital helps small businesses with a variety of credit profiles get access to the funds they need. We have over 150 products from a group of 67 different lenders. Contact us today to learn more about how our customized financing solutions can help your business.