Building business credit is essential for all businesses in North Carolina. It helps them get financing and stay on top of their finances. Small businesses make up 99.6% of all businesses in NC and employ over 1.7 million people. Having good business credits allows small businesses to get loans with lower interest and grow their businesses.
There are several strategies one can use to build a strong business credit. However, nothing beats the expertise of an accountant. An accountant in Charlotte, NC, who is aware of the economic landscape, can provide the best advice tailored to your specific industry. Meanwhile, read this blog to understand the basics of building business credit.
Tips to build business credit in North Carolina
Here are a few tips for building your business credit and opening greater opportunities for your business. Make sure to consult with an expert as well.
-
Keep personal and business finances separate.
The first step you must take when you open a business in North Carolina is opening a business account. This is important to keep your personal and business finances separate. Moreover, formally establish your business as an LLC, corporation, or other entity to protect your personal assets. Finally, obtain an Employer Identification Number (EIN) from the IRS.
-
Establish trade credit.
In order to have good trade credit, it is important to have good relationships with your suppliers. If you cannot pay right away, remember to negotiate the payment terms that you both are okay with. For instance, you can go with net 30 or net 60, where you have 30 or 60 days to make the payment after the purchase.
Always pay your bills on time. Even if you are a few days late, make the payment away. This shows that you are responsible and reliable.
-
Use business credit cards responsibly.
To build your business credit through credit cards, you must use them wisely. First of all, start by getting a credit card that is specifically for business operations, such as supplies and travel. Do not do anything that might harm your credit score. Make sure to pay off your debts in full every month and avoid interest charges.
-
Monitor your business credit score.
It is important to keep monitoring your business credit score to ensure it looks good. If you find any discrepancies during the check, report it immediately to avoid having a credit score. Make sure always to keep an eye on your credit score to ensure that your credit-building efforts are not going in vain.
Benefits of a strong business credit
-
Easier access to financing opportunities.
Having a strong business credit allows businesses to get loans approved more easily. It also allows them to get credit cards and lines of credit at reasonable terms.
-
Better relationships with suppliers and customers.
When you have a positive credit history, people are able to trust you more easily. It enhances the trustworthiness of your business and improves reliability among customers, suppliers, partners, and investors. This, in turn, results in an increase in partnerships and sales.
-
Better risk mitigation.
Having a strong business credit allows you to keep personal and business assets separate. Therefore, you won’t face personal liability even if your business experiences financial downturns someday. This allows business owners peace of mind and the knowledge that their personal belongings will be safe in all cases.
Boost your business credit today!
Growing business credit should be a goal and strategy for any business seeking long-term success. By taking the above-mentioned steps, business owners can open various doors and opportunities for themselves. Not only do you easily get funds in cases of need, but you enhance your business’s reputation as well.
Contact a Charlotte accountant today for expert guidance and tailored strategies to boost your financial health.
