It is seldom that a growing business finds itself in a position where it doesn’t need to obtain capital from a bank, investor, or lending institution to meet certain business needs. There comes a time when a company needs to expand its line of products and services or build new stores in new territories. No matter the venture, companies are going to be the tasked with acquiring funding and to do so, business credit plays a large factor in the business loan approval process.
About 6 in 10 startup businesses use personal credit or savings as their primary means of funding for business purchases. Although it may seem like a great idea initially to use your own capital for launching your business, it can put entrepreneurs at a disadvantage. Building business credit gives a company financial leverage and flexibility in the future. Companies that have established strong relationships with banks and lending institutions are able to secure lines of credit, lease equipment, finance company vehicles and most importantly, obtain business loans and credit cards without putting their personal credit at risk.
Owners of startups are encouraged to take advantage of business loans from online lenders like Fast & Easy Funds early on when their business is in its critical stage of growth. Doing so then allows for them to have more negotiating power later when they truly need additional capital to finance business endeavors. Additionally, a business with an established banking history may potentially be valued much higher in the event that the owner is looking to sell the company or acquire investors.