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As a small business person one of the most important assets you have is your Business Credit Report? Along with your own personal character and a good credit report you can just about name your own ticket in your local community. Furthermore, it can help you expand you business to the far reaches of the world. This article will give you some ideas of how important your credit report is to your profit.
As an astute business person you know you will have to contact new customers. In a lot of cases when you do the new customers want to know how reliable you are. Not only will they be looking for personal references but they want to know you are sound financially.
They may ask you to furnish credit references and other information about you and your company. Many times these new customers will use your business and personal credit report, to verify your financial stability and personal character. By chance, if you happen to have reports of outstanding debt, which has been unpaid or public judgments for failure to finish projects, your chances of landing this new customer are slim to none.
Not only can the above circumstances affect your ability to grow your business, it may prevent you from obtaining proper business insurance. In many cases you may have to carry a large umbrella policy for liability, before you can bid on certain jobs or actually perform the job function. In today’s modern society you and your company can be sued for anything and everything.
Without a proper credit rating, as reflected by your business or personal credit report, you may be refused insurance all together. If you are not insured you may be considered a higher risk and end up having to pay an outrages premium. Whereas with a good business credit report the insurance companies may look very favorably upon giving you a large discount off the premium.
One of the most lucrative forms of business for a small business is government contracts. Once again your personal and business report will be verified. This becomes especially important if your company and you are required to have a security clearance in order just to bid on the project. A reflection of bad credit on your credit report can stop a security clearance or other government contracts dead in the water.
However, with your outstanding credit and personal character, because you are a small business owner you can have a leg up on the larger companies. The reason for this is the Federal government; of the United States has special preference programs for the small business owners. This means you may be able to add another stream of income to your bottom line. Once again you can see how your credit report can help make you profit.
Here is a little tip that can help you keep your business credit report looking good and help your cash flow at the same time. Most companies, when they extend credit, will give favorable repayment terms to your small business, provided your credit worthy. If the term is Invoice Net 10 days, most companies will not report you as long as you get the invoice paid before 30 days are up.
If you are in a cash flow crunch, have your bookkeeper set up to pay the invoice before the 30th of the month. Make sure the bookkeeper allows enough time for the mail. This tip should only be used discreetly and infrequently. Otherwise you will get a reputation of using your vendors to finance your business operations for 30 days.
There is a drawback to this kind of credit repayment. Many of your vendors now will start calculating a late fee and interest payments as soon as the 10 days is up. So instead of enhancing your cash flow it can further deplete it.
You as an ethical business person have the responsibility of keeping your debts paid and paid on time. When you do this you have seen how your business credit report can be a profit center for you.
As an astute business person you know you will have to contact new customers. In a lot of cases when you do the new customers want to know how reliable you are. Not only will they be looking for personal references but they want to know you are sound financially.
They may ask you to furnish credit references and other information about you and your company. Many times these new customers will use your business and personal credit report, to verify your financial stability and personal character. By chance, if you happen to have reports of outstanding debt, which has been unpaid or public judgments for failure to finish projects, your chances of landing this new customer are slim to none.
Not only can the above circumstances affect your ability to grow your business, it may prevent you from obtaining proper business insurance. In many cases you may have to carry a large umbrella policy for liability, before you can bid on certain jobs or actually perform the job function. In today’s modern society you and your company can be sued for anything and everything.
Without a proper credit rating, as reflected by your business or personal credit report, you may be refused insurance all together. If you are not insured you may be considered a higher risk and end up having to pay an outrages premium. Whereas with a good business credit report the insurance companies may look very favorably upon giving you a large discount off the premium.
One of the most lucrative forms of business for a small business is government contracts. Once again your personal and business report will be verified. This becomes especially important if your company and you are required to have a security clearance in order just to bid on the project. A reflection of bad credit on your credit report can stop a security clearance or other government contracts dead in the water.
However, with your outstanding credit and personal character, because you are a small business owner you can have a leg up on the larger companies. The reason for this is the Federal government; of the United States has special preference programs for the small business owners. This means you may be able to add another stream of income to your bottom line. Once again you can see how your credit report can help make you profit.
Here is a little tip that can help you keep your business credit report looking good and help your cash flow at the same time. Most companies, when they extend credit, will give favorable repayment terms to your small business, provided your credit worthy. If the term is Invoice Net 10 days, most companies will not report you as long as you get the invoice paid before 30 days are up.
If you are in a cash flow crunch, have your bookkeeper set up to pay the invoice before the 30th of the month. Make sure the bookkeeper allows enough time for the mail. This tip should only be used discreetly and infrequently. Otherwise you will get a reputation of using your vendors to finance your business operations for 30 days.
There is a drawback to this kind of credit repayment. Many of your vendors now will start calculating a late fee and interest payments as soon as the 10 days is up. So instead of enhancing your cash flow it can further deplete it.
You as an ethical business person have the responsibility of keeping your debts paid and paid on time. When you do this you have seen how your business credit report can be a profit center for you.
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