Dealing with your business finances can be challenging, especially if you are just starting out managing your own money.
If you are diligent, you probably already know some of the most common financial tips in business.
These include sticking to a business budget, having an emergency savings fund, paying off business debts as quickly as possible, and always operating within your means.
However, there is one sage piece of advice that you have never heard before: Keep your business credit scores high.
Like your grades in school, it pays off to have high credit scores. They are similar in the sense that there are many benefits associated with both.
It is also tough to keep your credit scores high. Just like your grades, becoming lax means that your rating will slip, and pulling it back up is much harder than letting it fall.
To motivate you, here are some reasons to strive for that high credit score in business.
Higher Chances of Approval
Good credit scores help you when applying for such things as loans and credit cards. While your business credit score does not guarantee approval, it certainly does give you an advantage.
Other factors, such as your salary and existing business debt, also come into play. However, if those are acceptable, you will highly likely have your application approved.
When assessing your loans, whether mortgages or business car loans, you will not only want to ensure you have chosen the right car, but also be prepared for those lenders who will check your credit score before determining the interest rate you have to pay.
With a high score, you are likely to be charged a lower interest rate. This means that you get to save on how much you pay in total.
The Power of Negotiation
If the terms of the credit card or loan that you have obtained are not to your liking, you can try to bargain.
This would usually be a difficult topic to broach, but with a high business credit score, you have the leverage to negotiate for better terms and lower rates for your company.
This is because, from your score, lenders can assume that you will be a good customer and pay all your bills fully and on time.
The Best Credit Card Deals
Having a high credit score as a company allows you to shop around for the best credit card deals on the market.
Look out for benefits such as low-interest rates, cash back, travel points, discounts on petrol, and other rewards and incentives.
Signing up for these deals will help you to save even more money and make keeping your credit score high a breeze.
High Limits on Credit
If you must apply for a business loan, a good credit score as a backup can help to ensure that you are allowed a higher loan limit.
Since you have already proven that you can be trusted with money, banks will not shy away from giving you that much more money to use for whatever loan you require.
Just as car insurance policies will use a bad credit score against you, you can use a good credit score against them. With good business credit, you will likely have to pay less in terms of insurance premiums.
Security Deposit Waivers
When it comes to getting utilities and the Internet set up, some companies require that you pay a security deposit.
However, when you have good credit scores, you will most likely be able to have these fees waived.
Being in Good Standing
Lastly, having a high credit score is something of which you should be proud. While the score does not precisely define you as a company, it does identify you as a business that is accountable and trustworthy, capable of managing money, and keeping your account books balanced.