Do You Really Need Business Credit?

Do You Really Need Business Credit?

March 26, 2015
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Almost every business owner and entrepreneur have heard of the term “business credit”, but  how many of really know what it is?

Running a business can mean many different things–freedom, being your own boss, controlling your financial destiny, and doing something you truly enjoy. With all those benefits, often comes hard work and long hours, but end hopefully its all worth it.

With so many moving parts in running your company, building business credit the right way is often not the most pressing thing on a busy owner’s mind. However, it probably should be. We’ve heard that the lack of capital is one of the main reasons small businesses fail. Some have even said that it is the main reason, but that’s not exactly true-there are other contributing factors for small business failure like mismanagement, not understanding your target audience, lack of cash flow, etc.  Still, undoubtedly lack of capital is definitely in the the Top 10 Reasons Small Businesses Kick the Bucket.

Many business owners use up to 60% of their personal credit for business needs.  This can be okay initially if you are just starting out and have a solid business model, but the overriding intent should be to finance credit in the business’ name as much as possible.  If the business goes south for whatever reason, usually your credit usually goes with it.

Amazingly, even today, with the plethora of information available to us on the internet, business credit is still misunderstood by the majority of entrepreneurs. Just ask the average business owner what is a Paydex Score and a Credit Rating?  Most are clueless. If that’s you, then it’s okay. You’re not alone.  We’ve all been there.

Our goal is shed light on the mystery of business credit because there is really no reason everyone business owner should not at least get the basics. Why? Because the success or failure of your business depends on it.

There are three main business credit bureaus everyone should know about: Dun & Bradstreet, Experian, and Equifax. There are others, but these are the top three. Just like personal credit, each bureau has it’s own scoring system. We’ll get into that on another post.  Hopefully, you can begin to see why business credit is important for your company. Our job is to simply it for you so you can get the loans and credit cards your company needs to grow.