When you plan to grow your small business, you may find that you need to find financing to help you reach your goals.
It might be a need for just a little extra cash to buy new equipment or develop a new product. Or maybe it is a bigger financial injection in order to hire more people or kick off a marketing campaign. Either way, there are a variety of loan and credit opportunities to help you make the necessary investment for the next phase of your business growth.
No matter what type of business funding you decide to apply for (and there are plenty, so make sure you fully research the options first), the important thing to remember is that any lender or creditor will need the information in order to make a decision about your business as to whether or not you’re a safe investment.
The decision-making process will largely focus on your company’s credit score and risk profile, so the sooner you get this in order, the more chances you will have of obtaining credit in future.
Here are some tips building your business credit history:
1. Separate your personal and business credit history. This means you will minimize any negative effects that one might have on the other. Always channel business payments through your business bank account and keep any personal purchases completely separate.
2. Create an LLC. Credit building companies often suggest forming an LLC, S-corporation, or C-corporation in order to separate your business credit and assets from your personal profile. This way, your personal credit profile (along with your personal assets) will be better protected should your business run into any financial difficulties in the future.
3. Build a positive business credit score. Lenders will check your business credit score during the application process. They will look at your payment history and review whether or not you have made timely payments on credit cards, loans, and vendor contracts. Always keep this in mind and ensure you pay on time, every time. If you foresee difficulties with a payment, contact the supplier as soon as possible to work out a payment plan.
4. Choose suppliers that report to business credit bureaus. Try to work with a number of suppliers that report your payments to business credit agencies, as this can strengthen your business credit history. You may need to go out of your way to select suppliers that report to credit agencies over those that don’t.
5. Create a professional profile for your business. Lending decisions aren’t all black-and-white. It’s also about how your business is perceived from the outside. Your business should look and act like a professional, trustworthy institution, which is why it helps to have an office address, a 411-listed business number, even a website and email addresses linked to the same domain. It’s all about credibility – the more visible and active your business is, the more likely you are to gain your creditors’ trust and approval.
And if you’re wondering how to get an office address without spending a small fortune, we have a tip for that too.
Our partner, Alliance Virtual Offices, can provide an office address with a business phone number from as little as $79 per month.
It provides all the hallmarks of a regular physical office – including a recognized commercial address, mail processing, onsite receptionists, even offices and meeting rooms. The difference is, you only pay for the address – not the full-time office space.
That’s why it’s so cost-effective.
To the outside world, it looks like your head office. But if, like many entrepreneurs, you work remotely rather than in an office full-time, it’s a much more flexible and affordable option. Plus, you can still use the onsite office space and meeting rooms anytime you need it, for an hourly fee.
This solution can help you build a good business credit score for future growth, while at the same time conserving capital ready to invest into your business.
Want to find out more? Visit the Alliance Virtual Offices website to learn more about how a business address and phone number can support your business growth. Chat to a member of the team online and search for virtual office locations in your area.