In order to grow your business, then money is needed; there are no two ways about it. And there are several ways to go about getting it. You could use the profit that the business has already made and reinvest it. That can be a good strategy to take, unless you have some debt to pay off or will take a wage from the money that has been made. Which is why a lot of businesses will look to lend money against the business in order to grow it further, get more inventory, or expand your product line. But one thing that a lot of business owners don’t think about is the fact that they don’t think about the business’s credit score. By the time you’re thinking about it, you’re looking for lenders and being declined.
So if this sounds like you, or you want to make sure your credit score is looking good for the future, then here are some of the best ways that you can improve the credit score of your business. Then it will make it easier for you to get credit for your business, as and when you may need to.
Register as an LLC Business
If you haven’t already registered your business as a limited liability company then it should be something that is top of your list of things to look into.
When you register as an LLC, it means that your personal property and money are not associated with the business. So if all things did go downhill and you couldn’t pay off your loan, then it wouldn’t affect your home or mortgage, for example. Set up a business bank account and have details like the phone number different from your personal one.
Check Your Personal Credit Score
Though if you’re registered as an LLC, it doesn’t always stop lenders looking at your personal credit score to check how credit-worthy you are. This can be especially true when you have a small business with very few employees.
If they can see that your personal credit score is less than stellar, then there can be hesitations about your ability to pay money back on time. So you could check your own credit score online, or look for MyFico reviews to see if a platform like that would be worth looking into. Basically, Fico is the credit score most commonly used by lenders to evaluate your creditworthiness. So knowing where you’re at on that can be key.
Build a Credit History For Your Business
In order to establish the business as a separate entity, then you need to be building up a credit history for it. So with the business bank account, take out a small credit card or overdraft on it. When you pay for your expenses with it perhaps, but then pay the card off each month, then it is showing that you can pay back money that has been loaned to you, on time. So that can really help you to build up a credit score for your business, and show that you are a viable option for lenders.