The Good, The Bad, The Ugly In Small Business Credit

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Most of us have that moment where we sift through our credit reports and see smoldering wreckage. It’s tough to go your entire life without having your personal credit at least take a hit, if not end up in outright shambles for a while.

That doesn’t mean your business credit has to be poor, however. In fact, with the proper preparation and safeguards, your credit can be top-notch at your business even if your personal finances are in disarray. One of them, unsurprisingly, to improve your personal finances! But that’s not the only method.

The infinitely invaluable Intuit has three ways to accomplish this, and I thought I would briefly run through them and weigh in. I hope these are useful to you.

  1. Separation of business and home: Don’t get your personal finances tangled up in the business. Get a license, file separate tax returns for the business and get a separate phone number and business address. Do anything you can, in other words, to make it clear that the business you’re running is not a personal business, but a lean, professional operation.
  2. Get your house in order. You’ll have a lot less problems with your personal finances if you get them in order. Bad personal finance can limit the types of loans you have access to, so go out of your way to make payments in a timely fashion. This, paired with creating some distance between business and personal, should help you out immensely.
  3. Business-to-business finance. Hey, Intuit said it, so I feel totally justified to pointing you toward our financing programs. Because there’s a different scale at work here than for banks, you may have a better chance to get some financial help, and that’s what most of us are looking for. Did I mention our working capital? I’m totally shameless.

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Terms You Need to KNow

Working Capital Loans* seem to have their own language, and everything goes smoother when everyone is on the same page.

Whether it’s interest rates vs. rate factors, or determing ROI vs. cost-of-money, this ebook is a glossary of terms that every small business owner should know.

Photo credit to Renaudeh at http://www.sxc.hu/photo/1018806

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