ALW Funding Group’s advanced business credit building program, with in-house credit experts providing one-on-one guidance, can be a valuable resource for companies looking to establish or improve their business credit profiles. By working with a credit expert, businesses can learn what they need to do to deliver a strong commercial credit profile and access affordable financing and capital.
Business Credit
Building business credit is crucial for demonstrating responsible management of debt and establishing a credit history separate from personal credit history. This can help businesses maintain good credit and experience the benefits of having strong business credit, such as access to lower interest rates and larger lines of credit.
Building business credit also helps to demonstrate separation between owners and the business, which can protect personal assets in the event of business liabilities.
Build Strong Business Credit
Why Is Business Credit Building So Important?
Business and personal credit scores are important in determining present and future financial goals, as having strong credit scores can qualify you for lower interest rates and larger lines of credit. This can be beneficial during seasonal cash shortages, slow receivables, or when investments are needed for growth.
However, there is a learning curve to establishing, building, and maintaining your company credit scores and reports. Understanding and building business credit scores should be a priority if access to affordable financing and capital is a part of your business plan.
It is important to note that the business credit industry is highly unregulated, which means that anyone can purchase a copy of your business credit profile at any time without your knowledge. Even an established business that has been operating for years may not automatically have a business credit profile. Not all vendors and creditors report to the business credit bureaus or may only report to one, which can cause your payment experiences to go unrecognized in the eyes of business credit agencies.
A non-existent business credit profile or a business credit profile with little information can increase your likelihood of being denied for business credit cards, equipment leases, financing, and potential partnerships. Therefore, it is important for businesses to prioritize building their business credit profiles to avoid these negative consequences.
Proper Business Credit Building Practices
It is important for companies to develop a strategic plan for building their business credit, as not all vendors, lenders, and creditors report to the business credit bureaus. By prioritizing working with creditors who report, businesses can avoid damaging their reputation and appearing inactive or high-risk to interested parties.
While it is common for business owners to use their personal credit to run daily operations, it is important to separate personal and business credit to avoid liability and potential damage to personal credit scores. Building business credit can be achieved through loans, lines, leases, and business credit cards that report to the business credit bureaus.
There are steps businesses can take on their own to begin building business credit, but consulting with a credit expert can help prepare for growth opportunities.