Take Credit For Running a Financially Healthy Business

credit_scoreCredit scores can rise and fall as fast as temperatures during hurricane season.

One day you check your scores and you’re fine, and the next time you apply for a loan, you discover that you only qualify for the highest interest rates.

Business owners are particularly susceptible to the ebb and flow of their credit situation. Because business profits fluctuate according to the whims of the market, you could find yourself in dire credit straights in a matter of months.

As the following article looks at, there at least 5 ways your good credit can go bad.

Following is one common scenario that can happen to even the best small business owners…

Future Receipts Loan

Future receipts loans are a kind of business advance where you can get a certain amount of cash now in exchange for future sales. This loan is based on proof of past credit card sales. Your business is expected to perform in the near future as it has during the past, which is a reasonable assumption.

If you’re strapped for cash and perhaps looking to expand your business or need to make repairs to equipment, a future receipts loan can be a smart move. The problem arises when your business suddenly doesn’t perform as it has in the past, and those credit receipts don’t come in as expected.

Now here you are with an outstanding loan, with no way to pay it back. In addition, your regular business expenses are getting the best of you because of the unexpected downturn in profits.

Instead of feeling guilty or foolish, take immediate action before your credit score is impacted.

Collateral Loan Solution

One solution is to apply for a traditional collateral loan secured with one or more business assets. A collateral loan typically will have a lower interest rate since the loan is secured. With the money you receive from the collateral loan, you can pay off the future receipts loan you got, thereby keeping your credit score safe.

In the meantime, if you have to take cash advances on a business credit card in order to cover overhead expenses until business picks up again, you still can.

Don’t feel bad about having to weather through a financial storm.

There’s nothing wrong about borrowing money to expand or repair needed equipment. The trick is to face the problem head on and take care of it as soon as you can.

As long as you do that, your credit and your business reputation will be in good standing.

About the Author: Kate Supino writes extensively about best business practices.

Take Credit for a Good Credit Score in the Business World

credit_score As a small business owner, it’s important to make sure you keep your credit score on the right track. From securing funding to working with clients and vendors, your credit score can make a big difference in how your business performs.

Here are just a few reasons a good credit score is a must for your small business:

Increased Value

When your credit score is healthy, it gives both you and your business increased value in the eyes of lenders. Lenders are more willing to give you a small business loan when they see your personal finances are stable.

This is beneficial when you’re just starting your business as well as during different stages of business ownership.

In addition, a solid credit score makes your business more reputable in the eyes of financial investors as well as potential business partners.

Personal Confidence

Lenders and potential investors aside, having a good credit score will help you run your business with confidence.

When your own finances are in order, it allows you to concentrate on the business at hand. This is a good thing, especially when you’re just starting your business.

Future Lending

As the following article looks at, there are more than just 5 ways your good credit can go bad, which is why maintaining a healthy credit score is so important.

Whether your business has a slow month or there’s an unexpected medical emergency, good credit makes it possible to receive more lending.

Many business owners need more than just one loan during business ownership.

Keeping a stable credit history makes lenders more willing to give you financial assistance throughout the life of your business.

Qualifying for Business Credit

Having a healthy personal credit history is a steppingstone to qualifying for business credit. By building good business credit, your business will no longer have to rely on your personal finances.

Along with protecting your personal finances, business credit also makes your small business eligible for larger credit capacities.

This gives your business the ability to grow and take on new opportunities and business ventures.

Tips for Keeping Good Credit

Whether you’ve established credit for your business or you’re financing your business with your personal credit, it’s important maintain a healthy credit score. As mentioned before, good credit gives your business increased value and a solid reputation.

When it comes to healthy credit, there are a number of things you can do to stay on track.

They include:

  • Pay Bills on Time – From credit cards to utilities, paying all of your personal and business bills on time will keep your credit score high.
  • Check Your Credit Score – By checking your credit score regularly, you’ll be aware of any changes that take place. If your score drops significantly, your credit report will give you a financial outline of where you went wrong.
  • Monitor Vendor and Customer Credit Scores – If you extend lines of credit to vendors or customers, make sure you check their credit scores as well. Bad credit is a good sign your clients won’t follow through with financial obligations, which could ultimately affect your score.

Before you to take the small business world by storm, first make sure your credit is in good standing.

About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including small business and budgeting.