Separate Personal from Business
Most business owners do not even consider business credit as an option. This is a big mistake. Why put your company at a disadvantage? Larger companies have ratings, business credit and other measuresing tools. Their owners do not need to put up personal assets and credit for financing approvals.
So why do you?
The reason is that these larger firms have put in the time or hired a firm to help them build good business credit. Lenders, credit card companies and others can instantly look up their scores and approve terms without pulling based on business credit scoring rather than personal credit.
Good Reason to Build Business Credit
The following are some reasons to build business credit:
- Company Reputation + Credibility.Having excellent business credit scores and positive trade-lines demonstrates to lenders, vendors, suppliers, and others that your business is responsible and solvent.
- Cash Flow Management.Business credit enables the building of a business reputation that yields fruit in the areas of cash flow management. Business credit lines, corporate credit cards, low-interest loans and other tools/resources help a business manage cash flow.
- Supplier Net Terms.Suppliers are more willing to extend payment terms as you build solid business credit. Some factories and suppliers offer up to 120 days for an invoice to be paid. This is a gamechanger for cash flow management.
- Loans and Credit Lines.Business credit is a key factor in approvals, terms and conditions of a business loan or business credit line. The better your scores, the less scrutiny your business receives. There is also more speed in the approval process when a company has an excellent business credit score.
The sooner you begin to separate personal credit from your business the better. Your business was assigned an Employer Identification Number from the Internal Revenue Service for a reason.
Begin to use your EIN to build credit. Take pressure off personal credit.
Our team is available to help. Contact Cynthia Murphy at [email protected] to learn more.