Why Should Entrepreneurs & Small Business Owners Care About Building Business Credit?
There are many important advantages to developing business credit for both new and relatively well established businesses. In fact, no matter how well funded your operation is, or how reluctant you may be to actually use credit, it is literally a make-or-break for most business to survive, grow and succeed.
Let’s explore just ten of the reasons no sole proprietor, independent contractor, or c-suite executive should consider going another day without taking business credit seriously…
1. Separate Personal Credit & Business Credit
Separating business from personal credit is critical. In fact, Donald Trump is just one of the famous billionaires which will tell you that no matter how much you think you have, or how great things are going, failing to separate your personal and business finances will lead to disaster.
This separation can go a long way towards protecting personal assets from business liabilities. It is also a crucial part of protecting business assets and income from personal issues, litigation, and judgments which may arise from accidents or divorce.
2. Expand Your Credit Availability
There is only so much personal credit you’ll be extended before it starts hurting you. Developing business credit can greatly expand the dollar amounts available, even to freelance contractors operating under their own LLC's.
3. Staying Organized
Life is going to be a lot easier with separate business accounts and being able to track your expenses. Seeing where you are at and planning ahead will be far simpler with separate business credit cards and lines of credit.
4. Reducing Accounting Expenses
Having distinct business credit sources, cards and statements can significantly reduce the burden of accounting. This either means more time for business owners to focus on making money, or reduced labor costs which can be added right to the bottom line.
5. Being Prepared For The Unexpected
Imagine the embarrassment of your only two bank cards bouncing at an important dinner because of a bank glitch, hack, or identity theft. Having another business credit card in your wallet will not be underappreciated. What about during natural disasters when local banks are closed down and ATM's are not operational?
Business credit provides essential access to cash and working capital. Poorly planned cash flow projections or unexpected issues can quickly bankrupt even sizable entities. If you can’t pay suppliers, take advantage of the best opportunities, keep the lights on, or make payroll, you’re toast. Don’t let this common blunder take you down.
While limiting credit usage is smart financial acumen, there are times when growth is a must. When stretching is critical to maintain positioning and not just getting ahead, but staying in the game. In these moments you’ll be glad you planned ahead and developed lines of business credit.
8.Show Up To Meetings In Your Pajamas
With plenty of available business credit your venture won’t need to suffer from the distractions and expenses of chasing funding or outside investors. If you’ve already got appointments with venture capitalists booked, you can show up in your PJ's like Zuckerberg, because you won’t need their money.
9. Keep More Control & Profit
It’s not just chasing funding which is destructive for so many start-ups and entrepreneurs, it is often giving up control and profits. There are more than a few tales of start-up founders being fired from their own ventures after accepting capital. So, why not let your business claim its own credit and keep more control and profits?
10. Increase Business Value
While credit may not equate to net value, businesses with existing credit facilities in place can absolutely stand out by being more attractive and valuable to business buyers.
CreditRepairProgram.com Systems is the leading provider of credit restoration and credit building services for entrepreneurs, start-ups, and business owners. Get in touch with Credit Repair Program and start building your business credit today!