Thursday, 22nd August 2019 | Small business financing Canada,Business loans for bad credit
How to improve your business’s credit score
Your business credit score helps to establish your company’s health and trustworthiness. In many respects, it operates in the same way as a personal credit score—opening (or closing) pathways to products, financing, and preferred rates. Learn how working with iCapital can help accelerate this process.
Whether you’re just starting your business or in a position where you must repair a low credit score, building up your credit should be at the top of your list. Your business credit score helps to establish your company’s health and trustworthiness. In many respects, it operates in the same way as a personal credit score—opening (or closing) pathways to products, financing, and preferred rates. Learn how working with iCapital can help accelerate this process.
All about your credit score
Your credit score is a simple three-digit number arrived at from information gathered by the credit bureaus in Canada that is intended to give lenders, governments, and others a snapshot of how you use credit. The idea is simple: the higher the number, the better your score. In other words, a higher score means you’re less of a risk as a borrower.
How your credit score is calculated
Obviously, events like contact with a collections agency or bankruptcy will negatively affect your credit score, but there are other factors taken into consideration as well including the amount of debt you carry, how many times you’ve applied for credit, and how long you’ve had credit. This last variable can negatively affect new businesses. Establishing a good credit score is as important as repairing a bad one.
How to improve your credit score
One often-overlooked way to boost your business’s credit score is to use it—responsibly. This might seem counter-intuitive but consider this: if you don’t carry any credit at all, how can a credit bureau assess your risk as a borrower?
Applying for and using various credit products can be an extremely effective way to establish or repair credit. In any and all cases, you must adhere to the tenets of responsible use:
- Make your payments on time. Always.
Late payments reflect terribly on your ability to manage your finances. If necessary, set up automatic withdrawals or calendar alerts for your due dates. - If you can’t meet the entire debt, make the minimum payment.
Simply disappearing until you’ve got an entire payment is bad practice. Always pay at least the minimum. - Use your credit, but don’t max it out.
Having credit and not using it is not going to help your score. Use your credit on purchases you can afford, and then pay them off. Carrying a high debt load (or maxing out your line of credit) is a warning sign to lenders. - Consider your applications for credit carefully.
The amount of “hits” on your credit report can affect your score. Every time you apply for credit, a note goes on your account. If your report shows that you’ve been applying for numerous products it can be a warning sign to lenders. Select the products that work best for you and limit your applications.
Choosing your business credit accounts wisely
Chances are you’ve already got a business bank account and credit card—and if not, get on this. Beyond these basic tools, you might also want to consider applying for a gas card or an office supply store account. The best way to establish your company as a trustworthy borrower is to get credit and make your payments on time, and that’s where an iCapital product can really work in your favour.
When you take out an iCapital term loan or merchant cash advance, you select a repayment schedule. Usually, a small amount is automatically withdrawn on a daily or weekly basis until the financing is paid in full. The regularity and frequency of your repayments are a convincing demonstration of your solvency and responsibility.
A good business credit score is an important part of running a successful business. If your score is low—whether because you’re a new company or you have made financial missteps in the past—you’ll need a strategy to improve it. The careful selection and use of appropriate products are the best way to establish a healthy score.
Read Also
Marketing ideas for your business in the new year
As the end of the year approaches, it’s time to revisit your marketing strategy to meet current consumer expectations. Forecasting trends is tricky, but what’s clear is that in 2023, customers value privacy, inclusivity, transparency, and overall authenticity, and it’s your job to show them how your business practices meet these ideals. Read on for six steps you take right now to market your business in 2023.
Understand your changing audience
The first thing you need to do is revisit your market. Review your sales and marketing data to make sure you have a realistic grasp on the size, demographics, and character of your target market. Pay close attention to any changes in your ideal customer and use this updated intel to seek out new opportunities. For example, if your business has grown or taken a new direction in recent years, it might be attracting a new audience. Make sure you’re communicating with the most appropriate market segment.
Update your website
Your website is one of your most valuable marketing assets so it’s crucial that it be in good shape. Review your site to make sure all the content is correct and up-to-date. Check to make sure that it loads quickly and displays correctly across desktop, tablet, and mobile platforms. You probably look at your site regularly so consider getting someone with “fresh eyes” to take a look. Ensure that your site works intuitively and offers a seamless customer experience. A site that’s pleasant to use will help you convert new visitors and retain returning ones.
Maximize the potential of social media
With more than 4.7 billion people using social media, your business cannot afford to ignore it. If you’re just starting out on social platforms, now is the time to claim your presence. Set up accounts for your business on top platforms like Instagram, Facebook, and TikTok. Investigate which sites your ideal customers might be using and ensure you’re on them too. Post relevant content, regularly, and make sure that you keep your profiles fresh and current. Try running contests or promotions to boost engagement, and take advantage of the built-in shopping capabilities available on many platforms. You can communicate a lot about your brand values by aligning yourself with other local small businesses through collaborations or sponsorships.
Leverage video content and live streaming
Video content has been a rising trend for the past several years, and is well-suited to businesses who want to increase awareness, improve lead generation and sales, and reduce support calls. Consider how video content might work for your business, keeping in mind that consumers appreciate being entertained. Live streaming is popular and an effective way to connect with your audience in real time. Engage your audience with quality storytelling. Inform them with a clear and concise script. Be creative.
Get interactive with your audience
When was the last time you did an online quiz or game? How about worked with an online calculator or map? Interactive content is engaging, which is why audiences–and marketers–love it. It’s low-cost and can help you increase brand loyalty, generate leads, and drive sales. Think about ways your business can use interactive content to grab your customers’ attention.
Respect consumer privacy
More than ever, consumers are concerned about privacy. Demonstrate respect for your customers’ privacy by compliance with standards like GDPR, by properly acquiring and using user data, and by continually informing your customers of exactly how you’re handling their information.
If you want to stay ahead of your competitors in 2023, now is the time to fine-tune your marketing efforts to communicate your business’ authentic brand and values. Take an inclusive, transparent, privacy-first approach, to reach your target audience.
Marketing