Jeremy Robinson, Tetra Capital, 1/4/2017 – Oh no! You need a loan to help improve your cash flow or make a large purchase, like getting a new trailer, and your business’s credit score is too low for you to be approved. The good news is this is not a permanent situation, you can take steps today to improve it.
Get a credit card for your business
Obtaining business credit cards can be easier than you may think. It will help your business’s credit score if you use a credit card tied to the business as opposed to your personal credit card. Once you get the credit card make sure to use it and pay it off in full every month. Failure to do so will actually negatively impact your credit score.
Separate your credit and financials from your business’s
Separating your credit from your business’s is important for many reasons – one of them being that if your personal credit is less than perfect, it can bring down your business’s overall score. So take steps to separate your finances by only having personal bills come in your name and company bills come to the business.
Pay your bills early
This is one of the biggest factors weighing on your credit score. The earlier you pay your bills, the higher the rating you receive so always aim to pay your bills in full in advance of the due dates. If this is challenging due to cash flow obstacles you might want to consider freight bill factoring. When you partner with a factoring company, you will get paid immediately for your freight bills, eliminating the need to wait 30-60+ for your clients to pay.
Monitor and check your credit report
It is essential to make sure things are being reported to the credit agencies correctly, and the only way to ensure that is happening is if you monitor and check your credit reports.
Don’t overextend your credit
The credit bureaus check to make sure your debt to equity ratio is not overextended. If they deem that it is, your credit score will be negatively impacted.
In addition to these steps you can take to build and improve your business’s credit score, there are things you can do to improve your cash flow which will get you access to the cash you need when you need it.
Freight Bill Factoring
When you partner with a freight bill factoring company, they will pay you immediately for your freight bills. All you have to do is deliver your load, submit your freight bill to the factoring company and then you get paid! Eliminating the 30-60+ day wait for your customers to pay.
When looking for a freight bill factoring company make sure to look for one that will act as a true partner and has your best interest in mind. To ensure this look for factoring companies with no hidden fees, no application fees and no cost back office support services including invoicing, processing, postage, collecting, credit checks and more.
There are several different types of equipment leases you can take advantage of that can structure your payments in a way to increase your cash flow. From lowering your monthly payments to allowing for seasonal fluctuation in payment amounts, there is sure to be one that can benefit your business.
The key is to find an equipment leasing partner with an experienced team who will listen to your needs and customize a lease that addresses all your business needs.
By taking these steps, you will be on the road to improving your business’s credit score. Unfortunately, it won’t happen overnight but might not take as long as you feared it could either.