When you establish your own business, you will certainly need access to a constant stream of funds. This is particularly true for both small and medium-sized business owners. This is because they rely heavily on these funds in order to drive and grow their businesses.
While there is no doubt that business credit is essential to the life and future of many small businesses, a shocking number of small and mid-sized business owners do not know about this crucial financial asset. Not having good credit can throw a wrench in your business plans. If you are finding it hard to get your small business off the ground, Dricka Carter can help you.
What is Business Credit?
We can define business credit as the funds that an organization borrows from a bank, credit union, or other financial institution to meet their various requirements. Business credits is an avenue to pay for various expenses and allows for larger purchases than if a personal loan or personal credit card were used.
Financial institutions, such as banks, provide business credit mainly in the form of loans, like:
This is usually the first loan that a company takes in its lifetime. The loan usually provides funds for wages, supplies, and other business-related costs and expenses.
Working Capital Loans
You may have heard this term. These loans allow a company to meet costs and business expenses in the short-term in order to continue operating.
Why is Business Credit Important?
There are several reasons why your business may need a large sum of money upfront for an investment or a purchase that will help generate more income in the future. Business credit allows you to make these types of purchases and investments when needed, and you do not have to dip into the cash register.
Business credit increases the value of your company. Did you know that your business credit and the accompanying credit score are important assets when calculating the worth of your business? In many cases, businesses appear more profitable and valuable if they have strong credit.
And you should know that the better your business credit, the more economical and financial opportunities your business organization will receive. So, for example, if your company has a good credit history, then lenders will be more inclined to loan your business funds.
Join our business credit program.