We all know the havoc a poor personal credit score can have on our lives. But how important is your business credit score? If you’re just starting out in the business world or never put too much thought into it before, let us help. In this post, we’ll go over some business score statistics (so that you know where you fall) along with some tips on how to establish business credit and improve your small business credit score.
What Makes Up Small Business Credit Scores?
Does your small business have a credit card? If so, it probably has a credit score. Your business also probably has a credit score if you’ve taken out any type of loan. Before we get into determining factors, let’s first tackle one of the big differences between personal and business credit scores.
While personal scores have a large range of numbers (350-800), a business score credit range will typically fall between 0 and 100. The higher the number, the better your score is and the better your chances of securing low-interest credit cards or interest free loans.
There are a few factors that go into your business credit score. First, there are three credit bureaus to source information from. Experian, Equifax, and Dun & Bradstreet all determine credit scores a bit differently. But here are the main criteria used to determine your final number.
If your company fell on hard times a few years back, your business credit score could still be suffering. But know that there is hope at the end of the tunnel and that you still have options when it comes to securing working capital and growing your business. If you’re not sure what your business’ credit score is, you can start your search here.
Can a Business Credit Score Limit Your Growth?
Even though there’s light at the end of the tunnel, there are still a few hurdles you’re going to have to cross if you discover a poor credit score for your business.
The most obvious hurdle will be your inability to secure financing. A low score can equal plenty of declined stamps on your loan applications. And even if you are able to secure a loan, your interest rates could be through the roof, which is often an added expense businesses can’t absorb. According to a survey conducted by the National Small Business Association, 27% of businesses were unable to receive needed funding. This equates to approximately one quarter of businesses having a less than ideal credit score.
Another problem you could come across is that you might run into trouble finding space to run your business. If you’re looking to rent office space, your credit score will be the main criteria in deciding if you get it. Also, utility companies might consider your score if you’re looking for services. You could even run into problems trying to order materials or products because of a poor credit score.
Finally, you could run into problems just getting your business off the ground. Depending on local legislation, there could be certain criteria that you might be unable to meet with a low business credit score.
It’s also worth mentioning that a low personal credit score could have an effect on your business as well. But there are options to consider.
Tradepay Solves Your Small Business Credit Problems
Remember that light at the end of the tunnel? Here’s where to find it! Tradepay offers bad credit solutions for all types of businesses. Their trading platform offers unique advantages that can help businesses increase revenue and grow, even if they can’t secure traditional loans or have maxed out their credit cards. Here’s how.
Sales on Tradepay are handled a bit differently than what you may be used to. Payments consist of 60% cash and 40% virtual currency. This virtual currency, called Trade Dollars, can be secured through loans with 0% interest and without a background check. As long as you’re a legit business in good standing, you can qualify for a Trade Dollar loan. You can then use Trade Dollars to help purchase services and products for your business, stretching your working capital and providing your business with what it needs to be successful.
Tips for Boosting Your Small Business Credit Score
Even if Tradepay saves the day, you should still take immediate and swift action to improve your small business credit score. Start with these steps but keep in mind that the average business will need 12-18 months to improve their score.
Even though a low business credit score can be difficult to overcome, it can be done. Just as individuals can turn around their personal credit, so can your business. It will take time and persistence but keep your goals in mind when determining how to fund a new project or secure more inventory. There are plenty of ways to stretch your working capital and grow your business, all while improving your business score and building credit online. One of the best places to start being Tradepay. Learn more about Trade Dollar loans for low small business credit scores today.
