4 Reasons You Can’t Afford To Ignore Building Business Credit

Cost Of Ignoring Business Credit

Here are 4 things to consider before you start borrowing from friends and family or pledging your personal credit and assets as collateral to fund your business operations.

1 Business Credit Is One Of The Easiest Ways To Get Funds To Grow Your Business

Businesses need money to operate. That money can be difficult to come by if you have damaged personal credit, no assets, and/or no cash flow. Business credit can provide a quick and easy way to get the funds needed and with minimal effort.

This can be helpful with addressing common cash flow problems and other issues that a person might encounter in the course of running a business provided you took the time to build your business credit while building your business.

Bonus offer: click here to download our guide to setting your business up for maximum credit!

2. Business Credit Is Cheaper Than Personal Credit

Business loan interest rates are cheaper than personal credit cards and about the same as home loans.

Personal credit cards may be easy to obtain, but your personal credit will suffer as you borrow more and more. Taking the extra time to build your business credit, which rewards you for borrowing, will isolate your personal credit from business liabilities.

When considering the cost of financing you should also consider the risk. The risk of losing your home makes business financing the obvious choice.

3. Established Business Credit Helps Separate Your Business Accounts From Your Personal Accounts

Business owners that freely use their personal credit to fund their business operations are more likely to attract an IRS audit. Without a clear distinction between your personal and business finances, a business owner is also subject to their business’ liabilities, since the law will view the business owner as one and the same as their business.

FREE GUIDE: How to Set Up Your Business For MAXIMUM Credit

4. The Cost Of Doing Business Will Be Less in the Long Run

Building and maintaining a solid business credit profile will reduce the cost of operating your business in the long run, and the results can be dramatic.

Look at it this way…

With business credit a person might save:

  • $50 per month in interest on a loan
  • $15 per month on insurance
  • $20 per month on lease payments

What does it all add up to? Look at the savings over the next 5 years:

$85 per month in savings x 12 months x 5 years = $5,100

That’s over $5,000 in savings, all for taking the time to establish business credit now.

About The Author

Business Credit Coach

Brian Diez is a nationally recognized credit expert specializing in personal and business credit optimization. Brian is also the father, husband, and awesome friend.