The benefits of establishing a strong financial history and a good business credit score are widely acknowledged- particularly among the individuals who have been involved with the business sector for several years.
Having said that, this usually involves a significant amount of time, capital, and procedural hussle, and consequently is still avoided by many business owners around the U.S.
Most commonly, businesses tend to not even consider building up a robust credit score history until they need to apply for business loans or credit extensions.
This is a very inconvenient approach to adapt according to The Really Useful Information Company (TRUiC), as doing so will (likely) mean that businesses will need to significantly postpone any business company-plans that require significant financial assistance until a further point in time- where they have build up their credit sufficiently.
Below we will examine the best ways to go about this for businesses in 2021.
1.Negotiate Favourable Terms
Ultimately, every business needs money. Negotiating better terms for yourself and your business with vendors can go a long way in quickly building your business’s credit score adequately. This is because this will (generally speaking) enable you to repay any loans you take faster, and with more reliability.
Regardless of whether you own a prominent, industry-leading business, or just a small startup, the way in which you deal with your vendors will reflect your business’s: a) credibility, and b) reliability- particularly to future creditors, and can consequently mean that (in the future) you will be in a position that will allow you to attain lower loan interest rates when negotiating financier-related contracts.
2.Work With Your Lender
Aside from being able to negotiate better terms for your business, liaising with your lenders can additionally help you in that it will allow you to quickly and accurately understand the ins and outs of business credit.
Lenders may also choose to offer your business an installment arrangement; simply put, this allows your business to pay its debt in specified installments over a specified period of time. By doing so, your business’s credit score will automatically be improved (presuming you do not miss any payments that are due).
Whilst this is undoubtedly one of the best options for any business owner with ‘’small-business debt’’ according to TRUiC, the added benefit of improving your business credit score holistically makes it one of the most commonly cited steps in most ‘’how to build business credit’’ guides.
3.Open New Accounts
Opening new business accounts can be one of the most easy ways to fix your business’s credit score quickly and adequately. This is because a variety of lenders tend to offer trade lines of credit; these can be utilized to finance: a) new company equipment, b)…
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