Business Credit Myths - EXPOSED
“I believed that if I ate a watermelon seed, a watermelon would grow in my stomach.”
Did you believe that about watermelon seeds or even any other seed?
Do you still do?
A part of my rich culture as Jamaican born is that there are so many practices or even beliefs that I grew up thinking were true. When my twin boys were born I received so many pieces of advice and instruction on how to get them to sleep early, what they should eat at certain ages and the list goes on. I did try some of them for sure... realized that some of them were not true...they became myths EXPOSED! What is even more interesting is that these myths are still being passed down from generations to generations. So they are seen as truth until proven to be untrue!
Business credit positions your business in different ways–powerful ways–it is not always about the cash or credit you may have access to, it can increase your negotiating power and give your business access to better credit terms as well as interest rates.
That lead to why it is so important to understand what business credit can do for your business as well as ways to grow or increase your business credit.
It is integral to expose the myths related to business credit. As a CEO, Business Owner or Entrepreneur, you need to be aware of these myths and not allow them to cripple your business and its access to business credit as well.
Let’s expose at the following business credit myths:
1. You do not need business credit
Your business is cash rich or you don’t have any intention to borrow any monies in the future, so you think your business does not need business credit.
You need business credit for several reasons such as: a) Vendors will look at your business credit to determine credit and trade terms for your business. b) Business credit increases your negotiating power for rates such as insurance premiums or mortgage rates.
2. You have been in business a long time, so you already have good business credit
Business credit is not dependent on how long you are in business, it depends on the various transactions of your business – payment history, credit utilization and credit access. You can be in business and long time and still not have developed business credit.
3. Business credit does not impact cash flow
Business credit will impact your cash flow. It will impact the monies you spend in your business. If your business can negotiate better terms and interest rates that leads to less monies leaving your bank account! Who does not want that for their business?
4. Business and personal credit are the same
Business credit and personal credit are different. Personal credit relates to credit in your name as an individual. Business credit is related to credit in the name of your own business. Your business is separate from you as an individual; your business has its own registered number and own transactions.
5. Paying on time gives you good business credit
Sadly, paying on time will not lead to good business credit automatically. As a business owner, CEO, or Entrepreneur you need to ensure that your vendors are reporting your transactions to the relevant credit bureau as well as pay bills early as much as you can. Those two strategies will lead to your business developing good business credit.
I had to stop believing a lot of myths I grew up with – such as believing when I ate seeds, the seeds would start to grow in my body or even swallowing gum would cause my organs to get all sticky. So ironic that these same myths are ones I have to explain to my sons that they are not true.
As a business owner, CEO, or Entrepreneur, having great business credit needs to be a part of your strategy being executed in your business. The benefits gained from having good business credit are far reaching.
Spread the word and decide on the action steps you need to take in your business to start building business credit today!