Defining Your Business Credit Score
In essence, your business credit score is a reflection of the financial health of your company. It’s what most lenders will look at first when they are trying to assess whether or not you are a good candidate for loan approval. In addition to all the static information about your company, a credit report will show how promptly your payments are made to suppliers, as well as any tax liens, bankruptcies, or other judgments which may have been filed against your company. The intent of the business credit score is to show how likely it is that your small business will default on its debts over the coming 12-month period, and whether or not you are likely to go out of business during that time.
Defining your business credit score
There are three major credit reporting bureaus which store information about your business credit report, those being Equifax, Experian, and Dun & Bradstreet. Your vendors and suppliers may report your payments to any one of these agencies routinely, and that’s advantageous to your small business if you make those payments on time. If not, it can be a black mark against you when it comes time to apply for a bank loan.
Contrary to how personal credit scores work, your business credit score will not be a number between 500 and 900, and it will instead be a number from 0 to 100. Don’t be alarmed if you obtain a copy of your business credit score and find out that it’s only 85, because that means your business is in pretty good overall financial health.
It’s good to keep in mind that although your business credit score is not the only factor which gets evaluated when you apply for a business loan, it does carry a tremendous amount of weight. For this reason, you should always be aware of what your business credit score is, and you should do everything possible to maintain a favorable business credit score, so that you can obtain funding when you need it.
Is your business credit score less than perfect?
If not, we may still be able to help you with funding needed by your small business. Contact us at Black Wolf Capital Group to discuss options which we might be able to extend, for securing the financing which will help your small business grow.