The importance of building business credit, you don’t really hear about business credit being an asset but it is. Business credit adds value to a company’s financing ability and credit capacity.
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.
Large Credit Capacity – Businesses have 10 to 100 times greater credit capacity compared to personal credit. As a creditworthy business your company will be in a position to qualify for financing based on factors strictly related to the business.
Increase Company Value – A creditworthy business has a powerful advantage in financing ability. Because this asset is fully transferable with the business it makes it very attractive for a potential buyer or investor.
Protect Personal Credit – A business owner will be able to limit if not eliminate the use of personal credit checks since the company has its own credit ratings.
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.
Finally, it’s important to remember, the greater the business credit, the greater the worth and potential return you will receive if you choose to sell the business in the future.
Note:
With my experience in helping clients build business credit it’s 5 to 10 times faster to build business credit than personal credit, with much larger credit limits granted.