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How to Create a Great Business Credit Profile

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Your business credit score can play a major role in sustaining the success of your company. An organization’s credit score enables vendors, contractors, lenders, and other creditors determine whether you can pay your debts and still remain profitable. Understanding the importance of your business credit is crucial. No matter what your business credit score is, you want to improve it. Here are ways you can achieve that.

Apply for credit before you need the money

Soon after launching your company, you should start thinking about building credit. Small businesses often have to demonstrate good revenue for at least two years before banks will consider approving them for any sizeable line of credit. Ways to shorten that period include getting a minimal business credit card or a smaller loan. Even a limited credit history is better than none. If you have trouble securing even small loans, try obtaining a store-based credit line with your a big-chain supplier like Home Depot or Staples. Many major retailers offer commercial credit accounts that will contribute to your credit history. If all else fails, you could even obtain a secured card in your company name.

Know your personal credit score 

The chief factor many banks look at in deciding whether to lend new businesses money is the personal credit rating of the owners. Lenders normally expect a personal credit score of around 650. To boost personal credit scores, try to pay your bills on time. Maintain a low debt/credit proportion in your credit cards, preferably a debt level that’s under 30 percent of your limit. Also, be aware that lenders will generally check the credit of any business partners with an investment of more than 20 percent in your company.

Use credit to grow credit

Most businesses with high credit scores started small and improved them by applying early for as much credit as they could comfortably afford. Consistently obtaining, paying, and seeking additional credit will constantly improve scores with minimal risk, so that you can obtain a bigger loan when you need it. The better your credit history, the easier it will be to increase your credit limits. You might also consider establishing a credit profile with Dun & Bradstreet (, a business reporting agency used as a resource by many lenders. Adding credit references will help to develop a more impressive credit profile.

Consider the Alternatives

Traditional banks are not the only means of raising cash. There are nearly always other options, such as going public to raise stock, seeking investors, sale of rights to intellectual property or patents, or secured loans against business property. Another good option is merchant cash advances, where you can borrow against unpaid invoices. National companies like Business Credit & Capital can help you by providing funds that, unlike bank loans, you can use as you see fit, to pay off debts or invest in growth. With a business cash advance, there is less concern over credit scores, and the process is faster and less rigorous than applying for a bank loan.

Build relationships with multiple lenders

Banks are free to change their lending policies when it suits them. They may decide to lower your credit limit on short notice, so that you’re left with fewer resources than you anticipated. Therefore, it’s a good idea not to rely on a single lender for all or even most of your needs. Instead, try having credit cards from at least two major banks, and lines of credit from respected local lenders, including credit unions. A large bank may offer more products, services, and bigger loans, but a local lender is likely someone you can strike up a relationship with in order to discuss your needs personally.

Building up a solid credit rating is important for the future security of your company. But don’t forget that in the meantime, or when credit is already stretched, other alternatives like cash advance can keep the money flowing. If your debtors can see that you’re going to cover your bills, you’ll always be able to find more funding.

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How To Make Your Business Credit Application Stand Out


Most businesses will need help in financing at one point or another. Small to medium businesses, in particular, need to borrow money either for starting up or for expanding. However, applying for business credit can be a tiresome, frustrating process and small businesses are often rejected. This is because lenders are usually not confident that small businesses will be able to repay the loan. Thus, it is very important to make your business credit application stand out by proving that your business is creditworthy especially if you’re a small to medium-sized business owner.

Include A Solid Business Plan

Having a clear, solid business plan is vital when applying for business credit. Your business plan provides lenders with a summary of what your company is—its products, services, goals, team, and financials. It will show how your business earns money and how that revenue will be used for expansion and growth. Accordingly, it helps lenders predict whether your business is capable of repaying the loan or not.

To make sure that your business plan proves that your business is worth the credit risk, include a section outlining similar companies in your area and what makes your business different from theirs. Also, include a projected income statement and what you plan to do with the money from the loan.

Outline The Financials

The ability of your company to repay a line of credit or loan can be determined by its cash flow. Provide current and accurate financial statements that clearly outline the inflow and outflow of cash in your business. Make sure that you have a positive cash flow history to make your business credit application stand out and to encourage lenders to finance your company.

Check Your Credit Scores

Both your personal and business credit scores will be taken into account when you apply for business credit. Although alternative lenders consider credit scores of at least 550, scores above 640 are usually preferred. And if your company has multiple owners, each owner’s personal credit score will be taken into account. Your credit score helps lenders evaluate your credibility in repaying the loan. The business credit score, on the other hand, outlines the earnings, current assets, and other financials of your business. A poor business credit score can decrease the creditworthiness of your business and derail your business credit application. Thus, it would be better to check both your personal and business credit scores beforehand and try to increase it by, perhaps, paying off outstanding debt.

There are alternative lenders, however, such as Business Credit and Capital that can help finance small to medium-sized businesses that lack sufficient credit even without collateral. Consider cleaning up your business credit application for alternative lenders like Business Credit and Capital if your credit score is less than perfect.

Provide Trade References

Trade references can indicate your company’s credibility in terms of repaying a loan or line of credit. Having three to four strong trade references can really make your business credit application stand out since it indicates the financial health and management of your company. Include work history, recommendation letters, and if applicable, financial institutions you’ve transacted with in the past. This way, lenders will have more confidence in financing your business.

There is no guarantee that your business credit application will be approved despite your best efforts. If you do get rejected, ask what factors contributed to their decision and make the necessary improvements for future applications.

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