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Business credit is the lending of funds from one company to another for the purchase of goods or services and is also called corporate credit or trade credit. A tax service professional with AmeriTax Services has all the experience your small business needs to obtain this necessary business credit to lower expenses and save your personal credit.
Business credit is an often unrecognized source of financing for any small business. While many business finance experts may suggest using personal retirement funds or home equity to fund your business, business credit lets your business purchase what it needs while leaving your personal assets untouched. The professionals at AmeriTax will assist you and your business by guiding it toward a solvent, successful future.
Why does my business need business credit?
Business credit is separate from your personal credit, and every business owner should build this alongside their personal credit record. Building business credit can provide your small business with the following advantages:
- Business credit can save you time and reduce business expenses
- Your personal credit record will be protected
- Financial credit needs can be more easily met and managed
- Preparation for future financial needs
- Business operating funds and cash remain available for other uses
- The cash flow of your business can be extended and remain more constant
- The interest rate on loans is more favorable
- Business credibility is enhanced
The greatest advantage to having a good business credit profile is the cost savings it can produce. By acquiring and maintaining a favorable business credit score, your business will realize lower interest rates on loans and leases. Since your personal credit should rarely be used for business purposes and expenses, it is advisable to keep your business and personal finances separate, and by keeping business credit separate, your personal credit score can be maintained or even improved.
If your social security number is used to start or continue your small business, your personal credit score can be damaged significantly in a very short time. Even with no new credit established and existing payments continued as before, the experts at AmeriTax have seen credit scores drop nearly 100 points in fewer than two years when a business is run with personal credit. Had these business owners consulted with us before establishing their business or before their personal credit score dropped, we would have assisted them in establishing business credit that would have left their personal credit untouched. By keeping business credit in its own credit report, you increase the chances of obtaining lower interest rates and access to capital for your business.
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