Your business's credit rating can heavily influence lenders, suppliers or customers. It could affect their decision whether to work with you, or on what terms.
It therefore makes a lot of sense to monitor and manage your credit rating, as this increases your options for raising money, securing good suppliers and winning new business.
But how much control do business owners have over their rating? More than you may think.
Here are some practical tips for managing your business credit rating:
1. Get your current rating. You can obtain a credit report for free from a number of the leading agencies, including for example Experian.
2. Pay your bills on time. Paying suppliers late can negatively impact your rating. If necessary, renegotiate your terms.
3. File your accounts on time. Late-filing can be perceived as a sign of financial difficulties.
4. Manage your personal finances. Particularly where start-ups are concerned, lenders might look closely at your personal finances.
5, Credit-check your suppliers and customers. Select your business partners carefully.
6. Review your financial statements. The inclusion (or omission) of certain disclosures might have a significant bearing on your rating.
7. Continue to monitor your rating. Periodically review your rating to pre-empt and deal with any new issues.
Many small businesses would benefit from the above steps, which should take no more than a couple of hours to implement.
At the very least, do consider getting a free report to find out how your business is currently perceived. You might be in for a surprise!
Can we help you manage your business credit rating? Feel free to get in touch if you'd like a free consultation with one of our advisers.