There are a whopping 30.7 million small businesses that make up the backbone of the U.S. Do you own one of them?
If so, then the current global pandemic likely disrupted your finances. Did your business take a massive hit? After restrictions lift, you’ll need to learn how to rebuild credit for your business and FAST.
Otherwise, your business might not make it through 2020.
Not sure where to get started? No worries! Keep reading to learn five ways to boost your business credit and keep your company afloat.
1. Rehabilitate Your Payment History
What’s the single biggest factor that impacts your score? It’s your payment history!
If you’ve had trouble paying your bills, then your score likely took a big hit. Rehabilitate your payment history by prioritizing paying everything on time. You’ll start to see your score raise the fastest with this tip.
2. Analyze Your Credit Utilization
How much of your business credit is currently getting used? If you don’t know the answer, then you need to find out!
It’s a good idea to only use about 30% of your available credit. If you go higher than that, then your credit score will start to suffer.
3. Reach Out to Your Lenders
Are you struggling with the above two tips? If so, then it’s a great time to reach out to your lenders!
Most lenders will work with you to help you pay your debts. You might be able to negotiate a lower monthly payment, which will keep your accounts current. You could also ask for a higher credit limit to balance out your credit utilization rate, too.
4. Get Some Positive Trade References
What’s a trade reference and how can it help your score? A trade reference often comes from an industry supplier or creditor. It’s a statement that confirms your positive relationship with the other company.
When you have positive primary trade references, other creditors see you as trustworthy. It won’t immediately raise your score, but it will help you secure loans or lines of credit.
Ask your suppliers to provide your business with a positive trade review. Once you do, doors will start to open for you!
5. Consider Filing for Bankruptcy
Have you already tried the above four methods to no avail? Have you tried these business survival tips during COVID-19, too?
If you’ve run out of options and capital, then filing for bankruptcy can help. It’s not ideal, and it is a last resort. Despite that, bankruptcy can help your business restructure its debt.
Some debt could get discharged, while other debt will get lumped into a payment plan. In the end, your debt will decrease, and your score will begin to rise.
How to Rebuild Credit the Right Way
After a financial disaster, your business is at risk. You have to take action and learn how to rebuild credit. If you don’t, then there’s a good chance your small business will fail.
Take the above five tips into consideration to help your business succeed.
Are you ready to stop reading and start taking action? Here at CapFront, we offer several funding options for small businesses. Reach out to one of our managers now, and we’ll work together to find the solution that works best for you.
English 
Spanish