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Business Credit is Good for Business
Banks are businesses too. They certainly are not charities waiting to hand out money to everyone who asks, and though that fact may seem obvious to many of us, there are some entrepreneurs who almost expect banks to hand them over cash just because they filled out an application. If you are a business owner who has been turned down on a loan request, it is time to learn the real tricks of the trade for getting cash for your business needs—it is time you start building corporate credit.
If you have been making the costly mistake of using your personal credit to sustain or build your business, you must come to understand that there is an easier, less risky option. Building good business credit can take your business to levels of which you have never even dreamed. This is what business credit can do for you:
- It can get you the money you need. Without proper financing, you will never be able to launch or expand your business, and pretty soon it will hardly be worthwhile to be in business at all. Business credit gives you access to more money.
- You can sustain your business through tough times. You may not always foresee how the economy will change and affect your business for the worse. Business credit can save your business during a slow period.
- It can save you money. Business credit rates are usually lower than personal credit rates, and even just shaving off a few percentage points of interest can add up to thousands of dollars in savings. Business credit keeps you from spending money you don’t have to.
- It protects you. If your business fails, as 95% do in the first five years according to the Small Business Administration, any loans you secured on a “personal” level will follow you forever. Business credit protects you as an individual.
- It helps you establish credibility. You will only be able to secure sizable business loans if you look good on paper. Business credit, built up properly over time, establishes a credit history for your business and gives you access to more money.
In order to build good business credit, you must follow some very specific, yet simple, steps. The process, however, is not quick, but the goal is worth it. Ultimately, the goal for establishing business credit is to eliminate the need for an owner to sign a personal guarantee on a line of credit.
Now business credit comes in two forms—one is useful and the other is not, so borrowers beware. The least useful line of business credit, and of course the easiest to obtain, is a line of credit with an individual vendor. Vendor credit is only good at one location. For example, an office supply store may extend your business a $2,000 line of credit to buy paper, pens, etc. The problem is that you need money to build your business, not stationary, and the only way to get money is from a line of cash credit.
A line of cash credit is the true “pot of gold.” You need access to money that you can spend when, where and how you want, and that money comes from banks, not individual vendors. So when you begin building business credit, make sure you are building the right kind of credit the best way you can.
Corporate Credit Concepts makes it easy to establish business credit. To obtain your free report on how to build business credit and obtain Unlimited Financing click here: http://www.freecorporatecredittips.com.
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Article Source: ArticlesBase.com – Business Credit Article #3
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