Ways to improve your business credit

If you run an SME and have ever had a loan or credit application denied, you understand the challenges associated with trying to build a strong business credit profile.

Every business decision you make, and more specifically every transaction, can have an impact on a bank or creditor's decision to approve or deny your credit application.

Recently we considered tips for strengthening your SME's credit profile and this below are another three approaches that can help.

Pay on time

Since all your transactions can impact your credit profile it's essential that you do what you can to build a healthy credit track record. Paying your suppliers on time will provide evidence that you have the cash flow to meet obligations, in comparison late payments will make banks more cautious.

A strong payment history will also be a good reference point for lenders as it indicates that your business is performing well. Remember, if you expect your customers to make payment on time then it's important you make the effort to meet your obligations when they become due.

Apply for credit early and use it

One way to build your business credit is by applying for credit as early as possible even if you don't initially need it. By obtaining this credit early and making timely repayment you begin to develop a payment history. 

This process then allows you to provide payment evidence and build your credit portfolio. If you are intimidated by the application process, there are certain considerations that can ease your mind.

Secure vendor credit lines

You can still work on building your business's credit profile even if you aren't successful in securing a traditional loan or business credit card. If you have pre-existing relationships with vendors already it may be worth discussing with them the possibility of obtaining a line of credit. A line of credit can be a great way to use finance when cash flow is slow.
Building a credit profile for your business can be a challenging experience, especially when cash flow is slow.

However, options are available and by securing a loan or line of credit early on you will be able to actively demonstrate your strong payment history.

If you want to check on your company's credit rating, click here!

Connect with us to receive updates throughout the day:

Like us on Facebok Follow us on Twitter

Dun and Bradstreet AustraliaTop of page Dun & Bradstreet Australia Pty Ltd 2015 | D&B Small Business    *About Us    *Sitemap    *Advertise    *Privacy    *Terms & Conditions