One of the greatest assets that your company has is its credit profile. Yet, if you are starting out or have reached a rough patch in your business, it is easy for your credit worthiness to suffer. While you are in this situation, growing your business it typically not an option. Or is it? It could be if the proper path is taken to leverage credit improvements to build business strength.
Consider this: While your business is a weakened state, your competitors are most likely acquiring more of market share. Hence, simply keeping your business afloat during a financial crisis is not an insightful strategy. Either your business is making headway towards a goal or it is being left behind. We always encourage our clients to identify and implement a sound growth strategy before acquiring financing. Often entrepreneurs think of growth in terms of business size and profitability, but credit worthiness always proceeds these. Let’s see why.
Business Credit For What It Is Worth
A viable source of working capital is the life blood of every business. A lack of capital hinders will limit your company’s competitiveness and will render it helpless during a crisis. Even in healthy economic markets, your company’s capital deficiencies can prevent you from making profitable business decisions.
For instance, a weak credit profile could prevent you from acquiring equipment, adding human resources, meeting payroll, or paying necessary bills. A business line of credit may be an impossibility for companies with undesirable credit.
Low Business Credit Strategy
The short-sighted goal of maintaining business when credit issues exist should be replaced with a goal of building an excellent credit profile. Implementing this strategy may include seeking alternative lending that does not cripple your business with excessive fees and hidden charges. You should also build credit in the name of your business instead of relying on personal credit cards. Try the following to achieve this:
- If you have suppliers, inquire if they would be willing to report your business’s credit history with them to all major credit bureaus.
- Actively address the weakest parts of your credit profile. Try starting by ordering a free report.
- Review the accuracy of your credit statements monthly and rectify any mistakes that may be present; even smallest ones.
- Take advantage of a tax & financial professional who can align your business’s taxes and credit profile.
Successfully leveraging your business’s credit situation is the mark of a progressive mind. Yet, as the adage says: “It takes money to make money.” If you need access to funds to navigate your business to an area of growth, call STRADA Capital.