Running a business isn’t predictable. Heck, if you can predict your business expenditures down to the last dollar. We’ll name you our new business prophet. However, for everyone else that can’t predict the future- You have to keep a close eye on your capital. Having enough money to continue day to day operations can be considered the lifeblood of your company. It’s important to never run out, even in times of crisis.
There are many misconceptions about business and personal credit. Most importantly – personal and business credit should be kept separate. It’s better to not have your businesses credit line tied in with your personal credit. One example is that without business credit – in order to receive financing; you will need to start your business credit with a personal guarantee ( Owned personal vehicle or property ).
Another Potential Example: There are situations where businesses may end up cash flow poor and need an emergency infusion of cash to continue daily operations. This is where having business credit will help. Financial institutions will only lend to businesses that have proven themselves trustworthy. Without any business credit, Banks will not lend to you. This can be a lifeline for your business in tough times.
Having good business credit can help you obtain better interest rates, unlock special business financing programs and open more doors for you. You’ll have the safety net of additional capital if needed and that can allow you to take advantage of more opportunities.
Stay tuned for our following business credit articles, we’ll teach you specific methods to improve and maintain your business credit.