How to Build Your Business Credit Profile

What can a small business do to obtain finance and build a good credit profile ?

The first step is to make sure you have a well-written business plan, which includes all of the usual sections along with the necessary financial details. Be prepared to defend everything in your business plan by showing how you came up with your figures and developed your plans.

Next, you want to find out exactly what the requirements are for lenders and for credit bureaus. By doing such a credit assessment, you will know what standards are expected before you start to establish and build a credit profile. It’s always advantageous to know what is required of you before embarking on any such project.

To build or improve your credit profile, other methods are fairly simple, and for small businesses, they are not unlike the guidelines for improving your personal credit rating. You want to:

• Pay within the set terms of suppliers.
• Make sure to work with suppliers who are reporting your prompt payments.
• Try to limit the number of inquiries regarding your credit profile.
• Be careful of business credit cards. They are expensive, have a couple, not a dozen.
• Do not let licenses or registrations lapse. Make sure you are on top of renewals or obtain any new licensing that you are expected to have for your business operations.
• Maintain thorough, up-to-date financial records.
• Be watchful of where your business stands in conjunction to your industry. You want to know if you are spending much more or less than your competitors. Lenders will certainly be aware of numbers that appear unusual.

We assist many small businesses in all aspects of management. Please contact us if you need assistance in preparing applications for finance.