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Credibility is an essential part of any company’s overall health and when you are applying for business financing, one of the things looked at by credit providers is your Business Credit Score. Each business credit score report includes key facts about the business, a credit summary, business contact information, details regarding collections and payments made, bankruptcy filings, tax lodgements and more.
Your business credit score is a tool which lenders use to interpret the risks associated with lending the money. Typically, it’s a number from 0 to 1200 points that summarises the information on your credit report. The nearer you are to the maximum score, the better your business score is and the greater chance you will get a loan. Your credit terms and rates will also be in your favour when you have a good score.
Knowing that credit providers use the business credit score to get a clear picture of the financial health of your company, this can obviously impact your ability to obtain small-business loans or any facility that takes into consideration your credit score.
Business owners will often wonder whether a lender will approve their loan and on what terms and rates.
The answer more often than not, heavily depends on your business credit score.
There are many things that work behind the scene when getting to the final credit score. It includes your payments made and received, payment patterns, trade experiences and many other financial health indicators. It also involves looking at the industry you operate in and your public records. So many things at play, indeed!
The credit score is only a general idea of your risk profile. It may or may not reflect your real credit worthiness. It makes the process of lending faster and easier, hence it is used quite widely among credit facilitators.
Whether you are seeking a loan today or not, as a business you may require it any day. It is always good to keep ready which is why we advocate that it’s essential to know your Score.
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Brought to you by Kate Marsden, Marketing Manager, Capify
