Most existing businesses have or had some type of credit glitch or glitches during their operations. The following tips may help a new business or existing businesses
New Business Credit
As a new business owner, it is very tempting to utilize your personal lines of credit; this is the worst thing you can do to your personal credit and your business. What I highly recommend to new businesses is by starting off with a small alternative business loan like a small merchant cash advance loan or a secured small business loan; this will help you establish your business credit score and payment history quickly with Dun and Bradstreet, Experian Business Credit and Equifax Business Solutions
Seasoned Small Business Owners
If you are an existing business, I highly recommend purchasing the monthly monitoring programs with Dun and Bradstreet and Experian Business Credit, it will cost your company roughly $100.00 a month between the two subscriptions. In addition, it will save you grief down the road if a trade or lender is not reporting your information correctly. With Equifax’s Business Solutions, you may call in and order a business credit report, they will send you a copy in the mail and if anything is incorrect, then you would have to dispute the items or you can simply order your business credit report with them online.
For example: A small business owner owns four business cars that he personally guaranteed; the lender erroneously reported some late payments on his personal credit, which I restored. The owner and I called to verify if the auto lender also reported the erroneous late payments to my client’s business credit, sure enough they did report him incorrectly to all three business credit reporting agencies. I prepared the disputes to Dunn and Bradstreet, Experian Business and Equifax Commercial Information’s Solutions and provided all three copies of the cancelled checks to prove that my client was not late and update the payment history on his business credit report.
Not So Fast for Too Fast Credit
If your business is seriously cash strapped, possibly there is something wrong with overhead and/or sales. If your business had an emergency like an IRS audit and your company was penalized by the IRS and need cash fast, I recommend doing your homework first before signing your receivables away to an expensive cash in a flash alternative business loan that can get you out of your distressed situation within days.
For example: A number of clients who I do business with went into a super expensive alternative business loan. They did not do their homework of what the actual interest rate was and how the payment or daily payments (ACH) impacted their daily cash flow. Not only do these types of expensive alternative business loans hurt your cash flow, they also affect the exit strategy when you decide to refinance out of a horrible business loan, because that alternative lender maxed your company out of your debt service ratio. Therefore, would be ineligible for a traditional business loan because of maxed out debt service ratio. Your company may have to pay the full term organically to get out of the high interest alternative business loan, which affects the growth of your business.
I am not ruling out all alternative business financing, what I am suggesting is thoroughly read what the alternative business loan is about and how it will impact your business, is it for the better or for the worse? I have selected a small number of alternative lenders for alternative lines of business credit. A few of my self-employed small business customers were lucky to get out of their ugly alternative business loan that affected their daily business cash flow.
For more information on how we can help you fix your business credit and personal credit locally in Naples FL and Fort Myers FL and Bonita Springs FL please fill out the online contact form about your concerns or give us a call at 855.477-9007. Read what our valued clients have to say about First Pro Capital and Credit Consulting Professionals on our Testimonials page.