Why is business credit important to my business?
Good credit is the lifeline of your business. It enables you to obtain funding for things like expansion, capital expenditures, research and development, and staffing. It is the principal contributing factor to your business's future growth, not to mention the cash necessary for survival. Good business credit also allows you to keep the cash you have to cover your cost of doing business; such liquidity lets you respond quickly to time-sensitive requirements, without halting or compromising operations.
It's not just about getting access to financing; business credit has increasingly become the primary vehicle for setting terms on business loans, determining insurance premiums, even setting lease payments. Good business credit can earn you lower rates, strengthening your cash flow.
Tell me more about "business credit"
Your business credit record is the primary way that companies evaluate whether to do business with you-and on what terms. Companies rely on your business creditworthiness to make critical decisions, including whether:
- to sell to you
- to lend you money
- you are viable as a partner
- to lease the equipment you need to grow your business
- to increase your line of credit
- to help you carry more inventory at competitive prices
- to give you favorable financing rates and terms
- you stack up favorably against other companies competing in your market space
Business credit includes a variety of data points about your business, such as the date it started, the skills and experience of your top leaders, number of employees and annual sales. This type of information is listed in your business credit profile, along with scores and ratings that are derived from your business's past behavior to predict its future behavior. For example, your ability and willingness to pay your bills on time in the past is factored into your ability and likelihood of paying your bills in the future.
How can I protect my business credit profile?
In addition to keeping your payments current, debt down, and revenues growing (the best ways to assure a strong credit profile), the most effective methods of protecting your credit are to:
" Gradually close any accounts you're not using, but not all at once. If too many are closed at one time, creditors may view it as a sign of financial difficulty. Close only one or two dormant accounts per month
" Regularly monitor what's on your report quarterly and identify any information you think is incorrect. Notify creditors and D&B if you find any errors or discrepancies. You should also check your credit report for the three months prior to applying for a loan.
D&B (formerly Dun & Bradstreet) is the Canadian and global leader in business credit. All information about a business in the D&B database is "attached" to a D-U-N-S number.
Do you know your company's D&B D-U-N-S number?
A D&B D-U-N-S® Number is a unique nine-digit sequence recognized as the universal standard for identifying and keeping track of over 100 million businesses worldwide. Think of the D&B D-U-N-S number as the social security number for businesses. Used by the world's most influential standards-setting organizations, it is recognized, recommended and/or required by more than 50 global, industry and trade associations, including the United Nations, the U.S. Federal Government, the Australian Government and the European Commission. In today's global economy, the D&B D-U-N-S Number has become the standard for keeping track of the world's businesses.
Okay, but how does this D-U-N-S number and D&B business report help my business?
The D-U-N-S number is yours and yours alone and is directly linked to D&B business information and reports. Whether you are a new or long standing organization, having an accurate business credit report differentiates your business from any other in the world and can be used to help you achieve your business goals.
Knowing and understanding what your complete business credit report looks like is the first step you can take to ensure you put your best foot forward with current or potential creditors.
|
