The Importance of Business Credit
Building business credit is one of the most important things an owner of a company can do for themselves and the company they posses. Good business credit can open up opportunities for a company in the future to fund new income potential avenues.
BUILDING BUSINESS CREDIT IS IMPORTANT FOR MULTIPLE REASONS:
Increase company value
Low credit scores may be an indicator of financial stress on the business. This can make a company less attractive to buyers because it reduces avenues for growth and the type of low interest loans that are available to good credit borrowers.
The more credit line a company has, the more purchasing power it has. For example, if you are building business credit and have a $100,000 open line, a company can take that into consideration that they will be able to have access to the cash to build a new storefront or increase brand awareness without having to put more cash into the business beyond their current investment.
make additional inventory purchases
If a company is able to carry more items and stock more products, they are able to expand quicker. Investment in inventory can help spur additional growth without sacrificing cash flow. Companies with the right inventory at the right time for their customers tend to grow faster than companies without inventory. Business credit can help bridge the gap and return profits now instead of waiting for the growth to come as a result of 100% profit reinvestment.
Manage day to day expenses
Utilization of credit funds can be important. Seasonal businesses can directly benefit from credit dollars. For example, a carnival is only able to operate 2 weeks out of the year due to other events that happen on the grounds they are established on but bills start to accumulate in the beginning of the month before the doors to the carnival are open for business. Having good business credit allows access to funds for the first two weeks and then the owner can begin paying back the credit line and continue to operate profitably.
If you have not been able to get a credit line because of poor credit or would like to qualify for a loan. Check out financing options at www.confirmcapital.com. We may be able to get you the loan you need based on gross sales criteria instead of a credit score. Visit our website to Learn More.
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