A credit score is not the only thing that businesses need to have in order to be successful, but it can help them save time and money if they are trying to secure business loans. Here are six reasons you should care about having a good credit score.
1. Your Business Can Qualify for Loans When Needed
When you have a good credit score, you can be eligible for small business loans from banks and credit unions. You can also get government loans for certain programs such as the Small Business Administration (SBA), low-interest business loans from various levels of government, and local bank and credit union loans.
2. You’ll Get Better Loan Terms
If you have a good credit score, the interest rates you will be charged if you need to borrow funds are lower than those who have bad credit scores. You can also ask for better loan terms and more flexible repayment schedules.
3. You’ll Save Money and Reduce Risk
Having a strong credit score will allow you to save money on loans and reduce business risk because you will be less likely to default. If your business needs a business loan but your credit score is only average, it could be very risky for you to take out a loan with bad terms because of the possibility of not being able to repay the loan.
4. Your Personal Finances Are Protected
If you borrow funds and don’t repay that loan, the lender can go after your personal finances and property by filing a lawsuit against you. However, when you have a good credit score, your personal finances are protected, and even when things go bad, lenders will give you time to pay back loans.
5. You’ll Have More Options For Resources
You can be eligible for small business grants and government grants if you have a good credit score. These government programs might not provide any funds to those with poor credit scores because of their higher risk of default which increases the chance that they will not be paid back. Government programs might prefer someone who has strong personal financial management skills or has previously received government loans and repaid them as agreed.
6. Better Deals With Suppliers
When you have a good business credit score, your suppliers might offer you better deals. This is especially the case if you are buying supplies for your business on credit or using suppliers who offer lines of credit to their customers.
These are just some of the reasons why businesses need to maintain good credit scores. If you think about it, a lot of things surrounding your success as a business owner revolves around your ability to get loans at favorable rates and terms, be able to make smart choices with finances and planning, and take full advantage of business opportunities provided by the government and other organizations.
Global Capital Partners Fund can help you with a wide range of financing solutions to take your business to the next level. Their services include bridge financing, hard money loans, and joint venture financing in New York. Contact us today to find out more.