subject: Business Credit Concepts For Beginners [print this page] Business Credit Concepts For Beginners Business Credit Concepts For Beginners
Business credit may not be a term that many people are familiar with. If you intend to set up a small business of your own though, it is very essential for you to know how to build business credit and maintain a strong business credit profile. In essence, such credit means a statement about the capability of your company or business has to ensure repayment of the loans or payments due by your company. This is a concept entirely separate from personal credit and related cards. One needs to have good business credit to succeed even if the entrepreneurship that you are running has been around for some time.
Basics You Need to Know
There are many business credit bureaus that offer to evaluate and score your business credit. It is of great importance to volunteer information to these bureaus. Experian and Equifax are well known entities when it comes to personal credit. Did you know that these credit bureaus also have a business branch that only works to churn out business credit scores? Along with these, other important ones are Dunn & Bradstreet and FDInsight as well as many others. Corporate credit may not be easy to create and sustain but once the deal is done, you will be thankful for it for a long time to come. The scoring system works from 0-100 with anything above 75 being considered a good score to have.
Benefits Of Business Credit
Similar to personal credit, there are many benefits of having business credit too. Your company can apply for small business credit loans as well business credit cards. The latter ensures that you don't have to dip into your personal credit fount for business related expenses or startup capital. These are credit cards devoted to business expenses and other uses like leasing of equipment or even auto leases. Ensure that you create a pre-payment plan for your business cards. Look into the various companies and what they have on offer in terms of interest rates and other perks. Choose the best card that suits all your needs. A good payment plan is essential as it is best to avoid any unnatural debt accumulation that you have not accounted for in the first place.
As an entrepreneur, the responsibility of the business is on your shoulders, the last thing you need is a debt accumulation on the business cards that reduce or otherwise mar your business credit scores that you have worked so hard to establish.
In Conclusion
A good line of credit and finance is the backbone of any business. It does take time to create business credit for your company. In the long run, however, this allows you to stop dipping into your personal funds for business related expenses. If you are having trouble in creating this kind of credit, you can enroll in any business credit building program that is available. There are some companies that undertake this task for you at a nominal fee as well.
