How to Get Business Credit?

how to get business credit

What is business credit?

Much like personal credit, business credit allows you to access financed capital when and where you need it. And because we know that being a small business owner is no small feat, we’ve put together a comprehensive overview of what business credit is, how it works, why it’s important, and ways to keep your business in good standing in order to obtain even more financing in the future.

But we’ll start with the basics — what in the world is business credit?

Your business, like any other business, will be ever-evolving to meet the needs of today’s clients. Whether that means taking a dive into the digital-first world with an ecommerce site of your own, or trying to update your current offerings and visibility in a more modern way, you’ll always have a need for working capital.

And sometimes, it can be hard to come by. Most small business owners don’t have the spare cash to upfront the costs of growth and development, but that’s where financing can help.

How does business credit work?

Even though personal credit and business credit have some overlap in similarities, business credit relies on a combination of things to be considered for access to funding. Whether you’ve been in business for three months or thirty years can make a difference. As does your revenue stream, year-end profits, and any credit history that is associated with your business — all of which are key factors in determining your credit eligibility.

When considering what kind of financing your business is seeking, you should always be aware of your business’ credit eligibility as it can make a world of a difference when it comes to rates, terms, and financing types. But even more important is to assess what exactly your business is using the extra capital for, and how much you and your business can afford during your financing period.

Why is building credit important?

Every small business owner has goals. Whether they’re to expand into a new location, make updates at their current one, outfit their office with new technology, or simply maintain their payroll, there are plenty of financing opportunities to make those goals truly attainable through learning how to get business credit.

In order to be considered for small business financing, you’ll need to have a credit worthy score, a positive history of payments and profits, and be able to prove that your small business will be able to pay back the financed sum. Because just like personal credit, your business is constantly being evaluated for credit worthiness through your everyday actions. So, staying on top of those credit card bills or loan repayments is key in keeping positive business credit.

Another reason that many small business owners look into business credit is because they don’t want to dip into their personal credit in order to make those key business moves happen. Financing a new laptop for yourself might be easy (if you’ve got proficient credit) but needing to finance twenty might prove problematic if personal credit is the only player in the game. By building a positive rapport with your current creditors through your business, and being able to back up what you’re currently bringing in on the business side of things, you’ll be able to dip into your business credit without needing to personally take out new funding in just your name.

Lastly, business credit allows you to build relationships with vendors and suppliers and can help keep a steady flow of new credit opportunities open whenever you’re looking to finance something next. With a positive repayment history, you’ll be on your way to building business credit with creditors and suppliers alike, allowing you the freedom to access new working capital whenever, and wherever, you’d like.

 5 ways to build business credit

Looking to learn about getting business credit? Here are a few ways that can help bolster your credit worthiness in order to be financed:

  1. Regularly monitor your profile:

    Using free-to-access online tools for business credit monitoring —you’ll be able to understand where your credit worthiness is. You’ll also see the benefits of separating your business and personal credit usage, which can help determine your eligibility for access to new funding opportunities.

  2. Get a business credit card or line of credit:

    A business credit card, much like a personal credit card, allows you to access your financed capital wherever you and your business go. A business line of credit is much like a business credit card, but allows you to transfer the funds into your current business checking or savings accounts on a need-be basis.

  3. Take care of outstanding debt:

    Consolidating or paying off old debts entirely will bolster your credit worthiness by eliminating payments and lowering your credit usage rates. These are both factors in determining your business credit score, and can help you gain access to even more capital if you’re not already indebted.

  4. Make payments on time:

    Being able to prove that you’re credit worthy starts with the ability to pay back your debts. And one way to show this is by simply making your payments on time. Your future creditors will be able to assess the positive payback history, and can accommodate accordingly.

  5. Keep your business information updated with the bureaus:

    Being on top of your business credit is imperative — that’s why you should fully articulate any new information to the credit reporting agencies that monitor and track your business credit. By doing so, they’ll have the most updated versions of your credit profile, and creditors will be able to assess your eligibility without the hassle.

Business credit and your business

Small business owners, like you, are constantly moving their businesses forward — into new streams of revenue, and modernizing their approaches along the way. And sometimes, learning about business credit can make those dreams a reality. But in order to get there, taking all of the steps above into consideration will be a surefire way to access funding quickly, conveniently, and on better terms.

If you have any questions related to small business financing or would like to speak to a business advisor, speak to one of our expert representatives at Rapid Finance today: (877)-252-0827.

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