In today’s competitive society and markets, credit is nearly synonymous with reputation. Businesses, like people, must be able to demonstrate credibility and dependability. In the corporate world, business credit becomes proof of longevity, dependability, and quality.
What Are the Major Benefits of Healthy Credit for Businesses?
While many rely on their own credit to start their companies, establishing a line of credit associated with the business’s name helps to protect owners from the pitfalls of overextending themselves. Once a company’s credit worth becomes evident, that capacity becomes an asset for company itself.
Increased financing potential and credit capacity translates to excellent growth potential, investor attraction, and the possibility of business marketability. In fact, business credit acts as an intangible asset that fortifies the company’s reputation with both consumers and those in the market to acquire the next big thing. Even if the business owners would never dream of letting their successful business go, it makes good sense to grow a business others would dream of acquiring
Personal credit capacity is much lower than business credit capacity. With financing potential up to 100 times greater for businesses than individuals, it just does not make good business sense to struggle under the burden of debt that building a corporation grows. Sensible proprietors establish unique credit lines supporting their business ventures to protect their good names and their personal credit should hard times come around. With nearly devastating economic issues in the recent past, it makes good sense to consider the power of business ines as vital alternatives to personal credit lines for financing business futures.
What’s the Value of a Good Credit Rating?
Regardless of the nature of the credit line–business or personal–it is important to meet all financial obligations in a timely and efficient manner. Just as failure to pay personal bills on time can be financially devastating to individuals, failure to meet each payment promptly can do serious damage to the value of business’s name and bottom line. The point is to build excellent reputations with all reporting national business credit bureaus. Establishing a poor credit rating based on faulty financial planning will lead to discrediting the good name of the business.