Think of إقامة مستثمر في دبي and Apple. Did they rely only on their own money for growth? No. Even if you have strong sales and plenty of cash in the bank now, a day will come when you’ll need additional cash support to overcome an unexpected twist in your business. It might be the loss of a key vendor, partner, employee or client, but the companies that beat the odds are the ones who are in position to access OPM to bridge those tough times when they come. They don’t have to rely on their own cash reserves because they followed a clear plan from day one to build good business credit.
Most business owners learn the hard way that the day you need credit is not the time to start building it.
George Ross, the attorney for Donald Trump said, “The time to go to the banks is BEFORE you need the money.” Similarly, the time to start building business credit is the moment you form your business entity. That is when the business credit bureaus will start developing a file on your business. They say that the best day to plant a tree is ten years ago, and the second best day is today! If you missed that ideal starting point, the time is NOW to build your company’s business credit profile so you’re in a position to help your business grow.
These aren’t just opinions. The biggest authorities in the credit world agree that this subject is critically important to small business owners. What do they have to say?
The Small Business Administration (SBA) is clear on the importance of a business credit report. “If you are already in business, you should be prepared to submit a credit report for your business. As with the personal credit report, it is important to review your business’ credit report before beginning the [SBA] application process.”
According to Dun & Bradstreet®, managing risk is critical to the success of every business. That’s why banks, vendors, suppliers and partners turn to D&B® data to check a company’s creditworthiness before they’ll enter into any contractual arrangement. They advise every lender to check the ability of a business to pay on time before setting credit terms.
The Equifax reporting bureau issues similar warnings. “Understand your Business Relationships! Before you sign a contract with a key partner/supplier or ship that big customer order, make sure you know who you’re doing business with.”
According to Corporate Experian®, creditors and suppliers are increasingly using business reports to make lending and credit decisions. That’s why it’s important to establish a separate credit report for your business. If your business is new, or if you haven’t yet established business credit, obtaining tradelines (vendor lines of credit) is a great way to begin building your business credit report.
They go on to say that, “A small business score is vital for separating your personal and business financial risk. As a forward-thinking small business owner, you know that credit affects your ability to obtain capital to develop your small business.” Your business credit report can influence:
Entrepreneur Magazine stresses the importance of keeping business credit reports separate from your personal credit. “Fewer than 10% of all entrepreneurs know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses. Conventional wisdom has been that there are no consequences to using personal credit cards, home-equity line or a personal guarantee for a business. While it can make getting started easier, your personal assets may be at risk if vendors pay late, contracts are put on hold or orders are cancelled.”
That’s a sample what the big sources of business credit information have to say on the subject. So, what about the sources of the money? Here’s what the big banks say about the importance of business credit and how they lend money to business owners:
Both Citi® and Wells Fargo® are on record as saying that business and personal credit are both important factors when they’re making decisions on business loans and lines of credit. These are the “Five Cs” of business credit approval that Wells Fargo considers: