Have you heard that the best thing you can do for your small-business credit, is to keep it as separated from your personal credit, as soon as possible? If you haven’t, then now you have. And pay it good mind, because there is nothing worse than sabotaging both your personal and your business credit scores, doing damage that will severely limit your business’s ability to acquire capital in the form of loans and lines of credit. And that damage won’t be easily undone.
Beyond that, the importance of managing your business’s credit score cannot be understated. It’s the lifeblood of any business – the standing of your credit – allowing you access to emergency funding when you need it, capital for the purchase of equipment or to hire new personnel, and more.
You’ll be judged by prospective business partners, and if in the future, another company is considering purchasing your business, then they’ll want to know how healthy your business’s credit is too. Starting to get the point?
With poor business credit, your ability to lease an office space may even be hampered, which means that growth and even the survival of the business will be limited. Focusing on your accounts receivable, making sure invoices are paid on time every time, ensuring there is steady cash flow for your business, can go a long way to alleviating any misfortune.
With cash on hand and properly managed books, your business’s ability to pay off your own debt in the form of bills, payables, and credit card payments, is increased. In the process, your business credit score will remain healthy, and continue to get even better.
Make sure to keep some cash on hand to cover expenses, and then a bit more to cover you in the event of any unforeseen emergencies. Pay your bills on time every single month, and when you can, pay them off early. When you work with trade creditors, make sure they report to the credit bureaus in a consistent and responsible manner. Don’t close out lines of credit, and be careful not to open too many business credit cards all at once. Be smart and be reasonable, and protect your business’s credit.