If I asked you what a good consumer credit score is, chances are you would say a number between 700-800. Now if I asked you what a good business credit score, what would you say? The reality is 95% of business owners know little to nothing about business credit and why it’s important.
Many startups rely on the use of personal assets to secure funding for the business. Although money is often tight during the early stages, the goal of a small business owner should be to not only increase sales revenues but to build the company’s creditworthiness.
In particular, business credit is an asset and considered an economic resource that make up the financial foundation of a company.
Here are two important questions that you should be able to answer:
What is a tangible business asset?
What is an intangible business asset?
A tangible business asset is when you purchase vehicles, real estate, computers, office furniture and other fixtures exclusively for business use.
Intangible business asset are nonphysical resources and rights that have value to a business. Some examples are copyrights, trademarks, patents, accounts receivables and you guessed it – business credit. By building business credit with all the National business credit bureaus a company increases its finance capacity. This creates an asset that can be used to acquire financing for the business based on its own creditworthiness rather than that of its owners. By building business credit with all the National business credit bureaus a company increases its finance capacity. This creates an asset that can be used to acquire financing for the business based on its own creditworthiness rather than that of its owners.
Here are three major benefits of building business credit:
Building business credit truly provides remarkable benefits for a business and gives unique financial advantages in the market place. With this asset a business can secure lines of credit, lease equipment, finance a company vehicle, and obtain business loans and credit cards without putting personal credit at risk.