Welcome to the Small Business Ideas Forum! We are a community of over 100,000 small business folks with over 163,000 posts for you to browse. We pride ourselves on being the friendliest forum you will find and we'd love to have you as a member of our community. Please take a moment and register for a free account. If you need any help, please contact Chris Logan.

Small Business Ideas Forum

Small Business Ideas Forum

A friendly place to share small business ideas and knowledge, ask questions, find help and encourage others that are involved in the small business industry. Topics include small business marketing, generating revenue and small business computing.

Go Back   Small Business Ideas Forum > General Issues > General Small Business Issues
Register Search Today's Posts Mark Forums Read

Reply
 
Thread Tools
Old 15th May 2012, 01:28 PM   #1
TCCDepot
Member
 
TCCDepot's Avatar
 

Join Date: Apr 2012
Location: Southern California
Posts: 22

Default Why You Need Business Credit

Businesses have recurrent financial requirements irrespective of their age. As a result, whether you have an old organization, or a new one, financial aid is one of the key worries. The best solution to this problem is to have a business credit for your venture. However, many people have no idea what business credit is and end up using their personal credits for meeting their business needs.

Raising personal loans for corporate use though is one of the most prevalent practices, but it may have implications later on. Personal loans are given against your personal assets or credits. Defaults in payment may mean bad credit score, low credit rating, blacklisting your name for any future credits, or may even result in the attachment of the guaranteed assets. Each credit inquiry by the financiers from the credit rating agency also leads to decline in your credit scores by around two points. All this creates the need for business loans, which are independent of owner's personal guarantee. And a perfect answer to all this is, corporate credit.

Corporate credit are unsecured loans, issued after verifying business legalities and assessing their future profitability prospects. Here comes the most interesting aspect of corporate credit. Business credit is independent of your personal assets and credits. Your corporate credit do not have anything to do with your personal credit scores. No matter how much corporate debt you have taken your personal credit score and rating stay unaffected.

In spite of this existing benefit, some business owners still do not go for corporate credit. The most probable reasons seem that either they are ignorant of the concept of corporate credits or they do not know how to build it. As a result, they keep themselves deprived of the corporate credit facilities such as low interest rates, no LTV (Loan to Value), and huge loan amount they can avail. Therefore, continuing to follow the old trend of using personal credits and hampering your personal credit report does not make sense any more with corporate credit around.

Establishing corporate credit is not too cumbersome and even if it is for some, then it is worth the efforts in the purview of its benefits. What else, even new businesses can build corporate credit? As mentioned above, the lenders just ensure that your business is a legitimate one and will most likely generate profits in the times to come.

To avail corporate credit, it is essential that you adhere to all the applicable government rules & regulations, and move on the right path. You must see to it that your business has a legal entity as an LLC or corporation. All its legal papers should be in place. If any government license or permit to operate your business are needed, you should obtain them. In order to authenticate your business's physical existence, you should have all, starting from a valid address of your company to its telephone numbers.

Therefore, corporate credit provides the working capital needed for your business in a much better and simplified way than personal credit. It is important to keep in mind that corporate credit takes time to build up just like any other credit. A patient approach, efficient use of funds, and timely repayment of loan are keys to the growing corporate credits.

Hope this is helpful

TCCDepot is offline   Reply With Quote
Register or log in to remove this ad.
Reply   

Bookmarks


Similar Threads
Thread Thread Starter Forum Replies Last Post
Devastating Mistake #9: Using Personal Credit To Finance Your Business (9) TCCDepot General Small Business Issues 0 2nd May 2012 01:35 PM
Building Business Credit In Canada? at960062 Small Business Finance 0 5th March 2010 11:19 PM
Getting Business Credit Card With Poor Personal Credit... Greyboy General Small Business Issues 1 26th November 2006 11:12 PM
Three Steps to Starting Your New Business With a Clean Credit Score Linda Small Business Finance 0 9th January 2006 12:38 PM



Thread Tools

Get Updates
RSS Feeds:
RSS Feed for General Small Business Issues RSS for this Category Only: General Small Business Issues

RSS Feed for Small Business Ideas Forum RSS for Entire Forum
Forum Rules


Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


Small Business Ideas Forum


 
At Your Business - Small Business Directory
Free Business Forms - Prewritten Documents
 
Search Engine Guide
Small business guide to search marketing

 
Small Business Brief
Fetching the Best Small Business Info


Free Links - Free Advertising
Free Guide - Online Directory



Advertise your business here
Contact us for more details!


Semantic Juice
Register now to access free Quick SEO service!


Rocket Lawyer
Sign up for free 7 day trial. Boost your biz!


Buy UPC Codes
Get your products listed online!




All times are GMT -5. The time now is 08:40 PM.


Powered by vBulletin® Version 3.7.3
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
Copyright 2004 - 2018 - Privacy