How to Build a Strong Credit Record and Rating for Your Business

Having a healthy credit record for your business is vital in these difficult economic times where the amount of money available to borrow is in short supply. Being able to prove that your business is able to pay its financial commitments is imperative when banks are making lending decisions. It is also important to remember that it is not just banks who lend money – every time you (or a supplier) extend credit they are effectively lending money and you need to be sure that if you extend credit to anyone that you will get paid.

The importance of having a strong credit record and rating

Companies understand that company credit reports are available on every registered company and these are readily available from credit rating agencies. Company credit reports are based on a variety of factors which are used to build a credit profile of a business.

Company credit reports will typically include a rating (for example Creditsafe’s rating is based on the likelihood of a company entering insolvency in the next 12 months). A credit rating will typically take into account accounting factors such as whether there are any County Court Judgements (CCJs) recorded against the company, the length of time the company has been in operation and the background of its directors.

Also typically included in company credit reports will be information that can be used to build up a picture of their financial stability. Some agencies have started working with telecoms and utilities companies to build up payment data to show if the company can a) afford to pay and b) how quickly they will pay.

So let’s now have a look at some methods you can employ to help build a good credit rating:

1. Complete your report and accounts and ensure they are delivered to Companies House on time

Research completed by Creditsafe shows that companies who submit their accounts to Companies House in the last possible month are 8 times more likely to go into liquidation than those who file their accounts early. Filing your accounts on time and in full, shows credit rating agencies that you have nothing to hide – transparency is king! It isn’t to say that a business that doesn’t file until the last minute will enter insolvency, it’s just statistically proven that this more likely to happen. Also by being completely transparent you may even see an increase in your company credit rating on your company credit report.

2. Pay your bills on time

Ensuring your company has enough cashflow is a major issue. However by holding back and not paying bills on time sends out warning messages that your business is in financial trouble and at risk of going out of business. Credit rating agencies are constantly building up payment data from third party sources and using this information in their reports. If you haven’t done so already, consider restructuring your payment policy so that all payments are made by direct debit.

3. Pay suppliers within agreed timescales

This doesn’t mean you have to pay your suppliers in advance or even within 14 days, but it does mean that you should set up realistic payment terms with your suppliers and stick to them! A credit rating agency may not use this information within their rating algorithm however they may show this information on their reports.

4. Check your own group’s credit records carefully

Remember it’s not just your report that companies can see when they view your report. Many credit rating agencies will now show the records of other organisations within your organisation’s group or your parent company. Whilst these records may not directly affect your company credit rating it could have an impact on the person reviewing your company group as a whole.

5. Check out your existing and potential customers

In order to ensure a healthy credit record for your own company it is important that you are dealing with companies that are able to pay for any products / services they order. Many business owners do not feel the need to credit check their existing clients due to long standing relationships or the thought that the company is too big to fail – however the recession has shown how quickly this can change.

6. Take account of security threats

Shaking off a poor credit rating can take a long time even if it was caused by fraudsters and not your own business practices. As such it is important that you keep an eye on your company details (that are registered at Companies House) to ensure that no-one has attempted to change your details (a common practice amongst fraudsters).

7. Co-operate with your auditors

Being completely open and honest with your auditors is always a good idea as it shows full transparency of your financial records. Having positive comments from independent auditors can have a positive effect on your credit rating. Trying to hide information or not being completely honest will usually lead to a negative comment which in turn can lead to a negative effect on your rating.

8. Check your own record on a regular basis

It is vital to keep an eye on your company credit report and check this on a regular basis. By checking it regularly you can ensure that any old information is updated thus updating your credit rating. If you would like to know your company credit rating, click for a free company credit report.

Conclusion

Company credit reports are playing an increasingly important part in business today. Available online, they are both low-cost and high quality. Since more and more businesses decisions are based on information within credit reports, it makes sense to actively build a healthy record.

Creditsafe Group

Privately owned and independently minded Creditsafe is looking to change the way business information is used by providing high quality data in an easy to use format that everyone in an organisation can benefit from. If you would like information on any UK company, click free company credit report.

Five Financial Institutions for Niche Markets

In our current economic crisis, the need for flexible financial institutions is growing by the day. For people in need of financial assistance and cannot find it in the corporate world, it may be time to dig deeper into niche markets. Niche markets generally provide the same services as most corporate lenders and institutions, but usually carry some sort of prerequisite or requirement such as being a member of a specific organization. For people involved in these types of niches, financial assistance may be right around the corner. Below are five examples of unique financial institutions for niche markets.

1. Omni Financial – Omni Financial’s convenient direct deposit system lends members of the U.S. military stationed all across the world the money they need within 24 hours of approval. Omni offers a 100% satisfaction guarantee on all personalized military loans, available in denominations of $500 up to $10,000. Military personnel unsatisfied with their loan or services provided by Omni Financial have the option of cancelling their transaction and returning their proceeds within 15 days at no additional cost. Omni Financial accepts applications for military loans 24 hours a day and 7 days a week to members of both the U.S. Armed Services and U.S. Coast Guard. Apply for a safe and secure Omni Financial military loan today and receive a free credit report.

2. Golf Financial – Golf Financial is a national, full service financial institution dedicated to the golf industry, specializing in working with niche golf course entities including owners, designers, developers and management companies. Golf Financial sources funds for upcoming projects, restructures current loans to aid financial setbacks and offers a National Listing Service for municipalities, individuals and companies looking to sell their golf course property. Additional financing services and solutions provided by Golf Financial include acquisition financing and refinancing on existing operations, the restructuring of existing debt and the lending of development loans.

3. Advance Restaurant Finance – Advance Restaurant Finance secures competitive rates for small to medium-sized merchants in need of short-term restaurant, retailer and other business loans, especially for those with less than perfect credit. By securing lending in areas where most banks will stop, ARF’s financial professionals help restaurant owners retain control of their business while meeting their company’s goals. The flexible financing options available at Advance Restaurant Financing are cheap and simple, with an application process that is fast and easy. ARF funds loan payments quickly, and payments will not increase because of increased sales. Terms are available for up to 18 months and the interest paid on ARF loans is tax deductable.

4. Police Officer Loans – Police Officer Loans offers an Officer Next Door (OND) program helping law enforcement officers qualify for faster and more affordable mortgage financing. Requirements and eligibility for the OND program include living in the designated property as a sole residence for at least three years after the purchase and being a full-time, sworn law enforcement officer working for a city, county, state or Federal law enforcement agency. The OND program offers loans to police officers for multiple scenarios and grants reduced private mortgage insurance premiums with minimal down payment requirements.

5. Advance Capital Group Tow Truck Financing –Advance Capital Group offers a variety of tow truck financing and leasing options for businesses throughout the United States. With over 20 years of experience, ACG’s financial professionals assist people looking to upgrade their existing truck as well as those in need of purchasing of a new or used tow truck. Finance programs are also available for start-up businesses and institutions with challenged credit, with 0% due before funding and payments as low as 2% of the amount financed. Competitive low payments are available with terms of 24 to 60 months, and Advance Capital Group approves financing for tow trucks purchased from private parties, dealers and from their own inventory.

7 Companies that have "Gone Green"

Many companies have decided on “going green” in an attempt to preserve the planet and the people who live in it. When company goes green, they switch their focus onto saving energy and creating products that are environmentally-friendly that are often made from recyclable, renewable and readily available resources. Below are seven companies that have recently “gone green.”

1. Ordertree.com – The preferred choice for thousands of American’s, this environmentally-friendly company is one of the largest distributors for service parts, accessories and new products for a number of popular brands of outdoor power equipment, sustainable energy products, lawn and garden equipment, emergency storm and preparedness products, and power sports products. Just a few of the company’s energy saving (or “green”) products include electric lawn mowers, LED light bulbs, portable emergency radios, flashlights, power generators and chargers.

2. Green Home Environmental Store – Constantly searching for better ways to improve planet Earth, Green home, Inc. has become one of the longest lasting environmental stores and resource centers on the Internet. Since it was established in 1999, Green Home has brought together a core team of environmentalists from across the country to educate people and supply them with a variety of eco-friendly products in the categories of appliances, furniture, lighting, clothing, bath, bedding, office tools, personal accessories and more. Members of the Green Home team also test all of their products professionally before distributing them to their customers.

3. Seventh Generation – For the past 20 years, Seventh Generation has been dedicated to becoming the world’s most trusted brand of safe, authentic and environmentally-responsible products for a healthy home. The company’s business practice is focused on helping people express their idealism, passion and commitment to causes larger than themselves, and stands behind the Great Law of the Iroquois stating, “In our every deliberation, we must consider the impact of our decisions on the next seven generations.” Seventh Generation’s “green-living” products include free and clear dyes and fragrances, baby products, laundry detergent, household cleaners and other household supplies.

4. Green Pet Products, Inc. – Green Pet Products specializes in environmentally safe pet products, all of which are made from renewable and readily available resources. The company went green when they began offering a full line of premium litter and bedding products for small animals that are both highly absorbent and extremely effective in controlling odors. Green Pet Products understands that pets are members of the family, which is why they deserve safe, dependable and environmentally-friendly pet care products.

5. Simple Green – Simple Green is a socially responsible company with one mission, and that is to become the worldwide market leader in providing quality and environmentally safe cleaning products. All of the products supplied by Simple Green are non-toxic and biodegradable, and are specially formulated to fight the toughest cleaning jobs while remaining safe for your family and the environment. Cleaning products by Simple Green include all-purpose cleaners, motorsports cleaner, stone polish, stainless steel cleaner, house and siding cleaner, driveway cleaner and heavy-duty cleaner.

6. Michigan Green Safe Products – Committed to the environment, the team at Michigan Green Safe Products pride themselves on their wide selection of eco-friendly products, all of which are available at conventional product prices. All of the company’s earth friendly products are made from recycled material and renewable resources, offering a wide variety of biodegradable cold/hot cups, plates, compostable utensils, carry-out food containers and environmentally-safe cleaning and laundry agents.

7. Pristine Planet – Pristine Planet is a shopping resource that helps visitors shop, browse, compare and review sustainable products and companies. Pristine Planet brings socially responsible merchants together on one website, and the revenue generated from consumer purchases go directly to green businesses, which, in turn, is reinvested into organic agriculture, fair trade and sustainable business practices, benefitting the planet in a number of ways.