Managing the day-to-day requirements of the business can be an exhausting proposition all by itself, but at the same time, it can certainly be to the advantage of a business owner to be managing business credit for the company. When your business has a solid business credit history, it can really open up a lot of doors, in terms of being eligible for additional funding through loans.
If your company has a fairly stable cash flow, you might not think it’s important to have good business credit, because you don’t anticipate needing loans. However, if you ever want to grow your business and to achieve a higher level of operation, will almost certainly need to acquire additional funding to make that happen.
Why It’s Important
There are other reasons why it’s important to have a strong business credit for your company. When you do have favorable business credit, it can make you eligible for lower interest rates as well as lower insurance premiums. It might also help you get approved for a leasing arrangement, a business line of credit, some kind of a business loan, or you might even be able to obtain more favorable terms from your suppliers.
Separating from Your Personal Finances
Managing business credit can also be highly advantageous to you, such that you can avoid intermixing it with your personal credit and your personal assets. In fact, you may already have found that it was necessary to sign some kind of personal guarantee when you wanted to acquire a business credit card, or when you wanted to take out a business loan.
By doing that, it meant that you would allow yourself to be personally held liable for whatever debt was incurred if the business was unable to pay it back. This is an undesirable situation because it puts your personal assets in jeopardy of being seized. By building and managing business credit, you’ll have a much better chance of qualifying for business loans and other forms of credit, without having to use a personal guarantee which could put your personal assets at risk.
Business Credit with Monstera Lending Group
If your small business is in the process of building its business credit, one of the ways you can do that is by applying for some kind of loan and repaying it responsibly. Contact us at Monstera Lending Group to discuss some options which may be available to you in this regard.