Why You Need Business Credit

You might have heard of business credit from a lender, potential partner, or fellow business owner, but not know how it applies to your business. There are a variety of ways to use business credit to help you grow your business. A few of the most common ways can help you:

  • Win sales & loan opportunities
  • Negotiate for favorable lines of credit
  • Get awarded improved finance rates & terms
  • Generate better cash flow
  • Demonstrate greater credibility for increased deals & sales

Some lenders and potential business partners will pull your business credit report to help assess whether or not to work with you and on what terms. Here are three primary questions a business credit report can help answer:

  • How quickly does a company pay its bills?
  • How likely is it that a business might default on a loan?
  • How large of a project can a business handle?

Having favorable business credit scores and ratings may indicate that your business pays its bills on time or early, will not default on a loan, and has delivered on the projects it has taken on in the past.

What Can This Mean For You?

That depends on what your business needs right now:

Funding or Loans – Most traditional lenders will use your D&B D-U-N-S® Number to pull a copy of your business credit profile and use your Dun & Bradstreet scores and ratings to help make decisions about whether or not to grant your loan and at what terms.

Contracts – Whether you’re a supplier, manufacturer, or own a construction firm, a company you’ve wanted to work with has probably pulled your business credit report to help determine whether or not your business will be a reliable partner.

Risk Management – If you’re on the other side of the fence and are looking for vendors, you might want to consider pulling a company’s business credit report to help ascertain if you want to work with it or not. If you partner with multiple vendors, you probably have experienced the frustration of trying to monitor those companies’ business credit files to help make sure that they can be relied on.

Now that you know why you need business credit, you can learn more about How to Build Business Credit and How to Develop a Best-in-Class Risk Management Strategy.