In the world of business, credit plays an integral role at every stage of a company’s existence. It is a part of your company’s financial power. Credit helps your business get the working capital it needs now, such as a line of credit or a business credit card, based on your promise to pay later.
Working to improve your knowledge of credit helps ensure you will qualify for it when your company needs it. Although there are many types of personal and business credit, the two most common types are installment loans and revolving credit.
An installment loan provides a set amount of money loaned to your company to be used for a business purpose.
Revolving credit, such as a business credit card, is a line of credit you can continue to keep using after paying it off. As long as the outstanding balance stays under the credit limit, you can make additional purchases up to the credit limit.
For credit savvy business owners, having a firm and knowledgeable understanding of credit plays an essential role in the success of their business. Regardless of a business owner’s background, becoming more credit savvy is possible by studying and adopting certain qualities and traits.
Here are 5 key traits of credit-savvy business owners:
They are determined – Once they decide to do something, they will not let anything or anyone prevent them from accomplishing it. From learning how to better manage their company’s finances to exploring alternative financing strategies. This determination allows them to achieve results no matter what obstacle or challenge they may face.
They are proactive – They take the time to invest in their credit education. They learn, study and research personal and business credit, including information about funding programs, credit products, and credit ratings. When you have an understanding of what options are available, you can make well-informed business decisions related to your company’s finances.
They are decisive – Since they are well informed and credit savvy, they are quick to make financial decisions such as when and how to complete a business credit application. When it comes to acquiring credit, they know their numbers, the cost of financing, terms and conditions and other important details.
They are resourceful – Credit-savvy business owners understand the need for being resourceful. They understand at times there will be financial challenges so they find clever ways to raise capital from various sources. They establish multiple banking relationships so they can maximize their company’s funding potential.
They have confidence – The residual benefit for educating oneself about credit and financing is confidence. When you have a certainty about handling credit and finances for your business, you inevitably will feel secure about your abilities.
For a business owner to be credit-savvy, you must possess these types of character traits which many people don't have. You must be able to spot very unique opportunities that might help you in getting the credit and capital your company may need.
When you model the success of other credit-savvy business owners you accelerate your own success. Take a close look at your personal and business credit files to determine what areas you can improve. Finally, learn about all aspects of credit and finance because it will play an important role in your personal and professional life.
SOURCE: https://www.sba.gov/blog/5-key-traits-credit-savvy-business-owners
