How Important Is Our Business Credit?

Image by: SalFalko
By Michael Sterling

The way our financial system works today is always going to leave you scratching your head. It seems like no matter how hard we work, the money we gain is always going to end up paying back some type of interest or loan that we owe, resulting in a never ending circle of debt. But it doesn’t have to be this way.

Knowing how the banking system works, we need to be one step ahead of the game and work the system to our benefit. Thousands of businesses in America survive on credit cards and loans. With this tactic, it can take decades before you start to see real returns. If you want to maintain longevity, the catalyst must always be a good business credit. Without which, your company will stagger.

One fact we can’t escape from is that most companies need loans to keep their business afloat – especially when they’re just starting out. By keeping and maintaining great credit, all of these so called “interest and loan” barriers that keep companies prisoners of their own debt can be much more in control.

Separate Your Personal And Business Credit

It’s important to separate these two.┬áHaving great personal credit is important, but it also must be protected. Never integrate the two worlds. If things go wrong with either sanctum, the other will be held accountable which will reflect badly in credit ratings. Keep them as far away from the other as possible.

Let the business credit be solely reliable towards things associated with the company, otherwise all the “good credit” benefits will go elsewhere and you will lose the opportunity to gain a higher credit score.

Business credit has a lot more wiggle room than personal credit. The gaps are much higher and there is a greater capacity as far as limits. You don’t want the likes of that to be smeared across your personal credit score if something goes wrong.

Increase Your Value

With great credit can come overwhelming investment opportunities. Potential buyers and investors can take your credit as an incentive for solid returns. Consider your business credit a name tag that says “I Have a [blank] % chance of paying you back.” If you were an investor, what kind of numbers would you like to see?

By having great value, it makes your company’s worth higher. Despite the fact that you are still paying back loans and credit bills, your business credit will be the best price tag you have in showing just how much your company’s value is. If you ever decide to sell it in the future, the value can double even triple when the credit is high.

Here’s a tip: is a free forum that will connect you with other business owners and professionals that discuss tips on how to build up business credit. Raise concerns, ask questions. There are so many loopholes that most company owners fail to see.

Know Tangible vs Intangible Assets

This is crucial to understand because it allows yourself to know which purchases are investments and which ones aren’t. Spend your money on things that will truly be an asset. Don’t get caught up in the pressure to spend more than you need.

Tangible assets are physical things that you need to do the day to day business, i.e office space, furniture, computers, printers. Intangible assets are nonphysical resources that will help you gain more value, i.e. business credit, copyrights, patents, trademarks.

Spend your money wisely. A real asset is something that you invest in which will help you gain money in the long run. By spending more money towards intangible assets, you stand more of a chance to increase your credit ratings since these things help you to secure and bring in more wealth, and with the extra cash, you can then buy more tangible things.