Every business needs a good credit score for access to financing. It’s one of the most critical aspects of business ownership, and it’s something that you as a business owner should constantly be maintaining.
The business credit score is a critical component of your business’s financial health. It can be a significant determinant in whether or not you get approved for business loans and other financing options to help grow your business. The higher the credit score, the more favorable terms you’ll get on various business loans and lower interest rates on new debt.
In this blog post, we’ll talk about four best practices for maintaining a high business credit score – from making sure you’re paying all your bills on time to managing your cash flow efficiently!
1. Be Careful to Manage Your Cash Flow
It’s essential for business owners, especially those who own smaller businesses with lower cash flow, to stay on top of their cash situation.
Staying financially healthy is critical if you want your business credit score to remain high – and that means being proactive about things like keeping accounting records up to date, effectively managing receivables, keeping a cash reserve, etc.
2. Maintain Accurate Financial Records
You’ll need to be able to show how you’ve paid off business debt – so don’t lose any important business documents! All of the financial records should be up to date and easily accessible.
It is an absolute must to prepare financial statements periodically and analyze them to know exactly where your business stands. Since all of your business transactions play a vital role in determining your business credit score, you must stay on top of the accounting records.
3. Pay Your Business Taxes on Time
Paying business and personal taxes is a legal obligation, which means that failing to do so will result in detrimental consequences for your business.
If the government determines that you are not fulfilling your tax obligations, they can take severe punitive actions, such as a lien against your property. Such blemishes also affect the business credit score.
4. Keep Business Credit Card Balances Below 30% of the Available Limit
Having high credit card balances for long periods can also hurt business credit scores. It’s best to keep business cards at or under 30% of the total amount of your credit limit to maintain a healthy business credit. This will help your business stay out of unnecessary debt – which is a business credit score killer.
The Final Word
If you’ve tried everything and your business credit score is still not where you want it to be, there is another option: business credit facility services!
At Hughey Enterprises Inc., we believe you are much more than a credit score. That’s why we provide businesses with bad credit or no social security numbers in Los Angeles with a minimum loan of $50,000 within 90 days to address their immediate business needs. Sounds too good to be true? Book an appointment with our experts and experience our services yourself! We look forward to working with you soon!