Month: December 2022

Your small business credit score determines whether or not you’ll be approved for new credit, your interest rate, and how much you’ll pay to borrow money.

Banks, lenders, and other financial institutions use your small business credit score to determine if you’re a risk or a safe bet when extending credit. 

Your small business will most likely require financing at some point. Whether it’s getting a loan from the bank, applying for an invoice financing program through vendors like Amazon, or partnering with another company to expand your reach. Any time you borrow money as a business owner, the lender will check your credit score. So the better your score, the easier it will be for you to get financing for your small business. 

Why do businesses need a credit score? 

A business credit score is essential for several reasons. It can help you get a business loan, a line of credit, or other financings. It can also help you get better terms on loans and lines of credit. Also, a good business score may help you get a lower interest rate on a loan or line of credit. 

Benefits of a strong business credit score 

A good business credit

We speak to credit score expert Paul Ryan to discover what a business credit score is and how you develop, maintain, and use your score

A business credit score is very similar to a personal credit score. Just like a personal credit score, your business credit score is an official measure of whether your business is likely to repay its credit, loan, or debt. Companies, including Equifax, Dun and Bradstreet, and Experian, create and update these scores based on your business payment history and cash flow. With a good business credit score, you can fund your business growth and operations far more easily. 

“Credit score companies look at the business’s payment history. They check if you are paying on time and confirm whether your business might be a little late in paying its credit or, worst case, delinquent. That’s the number one check credit agencies check,” said Paul Ryan, Business Solution Architect, ProSource. “I advise organizations to ensure that any type of credit you use is provided to the credit agencies. These include credit, leases, credit cards, and any other vendors or other payments that may not be applied to a credit score automatically.”  

Establishing a line of credit is