Every business set-up needs a timely injection of funds for a large list of reasons like working operations, equipment & machinery purchase or diversification for growth. Here, the finest way to fund these needs is by pursuing a loan. So to begin, the lender checks & studies your personal credit score. Similarly, when you apply for a business loan, the lender checks your business score before approving your loan request.
A business credit score at 750 or above is considered favourable for consideration and permits a bigger sum of money along with an interest amount. So, if you already know that your business credit score is low, then immediately start to work on it. Every step towards improvement will add a feather to your financial cap.
Let’s take a look at why building your credit score is significant :
1. To Speed up Borrowing
When you’re looking for funds to invest in your business, a good credit score automatically increases your chance to have faster approval & disbursal. It shows a clear image of your creates business and the lender has trust reinforced. And this way your application receives an advantage.
2. To Get a Higher Loan Sanctioned
As a business entity, you may need funds to streamline your important cash issues whether it is to lease the factory space or buy business software. Under these circumstances, you need a huge commitment of money. And of course, a high credit score depicts your great financial performance & credit history which encourages them to offer a higher loan amount or pass on the privilege to negotiate for a higher sum.
When you apply for a Loan for Business from Home Credit, you can receive a loan amount upto Rs. 2,00,000 to meet all your basic & operational business needs. They specifically benefit like instant online approval, the quick disbursal and flexible repayment tenure make this loan one of the most convenient sources for a loan.
3. To Gain from Lower Interest Rates and a Tenure
With a higher credit score, it’s easier to tap a low-interest rate loan. Your profile gets shortlisted for a faster personal loan to meet business deals. If your credit score is reliable, it saves you from all probable risks and also cushions lenders & their interests. In the same way, you have improved chances of bargaining for a favourable tenure and combat their financial situation. So, you can select a longer tenure, if at all required and repay the loan amount with convenience. This will further strengthen your business credit score, available to lenders.
So, now you exactly know the significance of a good credit score. Here, it is extremely important to note that your business score relies on a plethora of factors. These include aspects like on-timely repayment of the debt, careful use of credit and debit cards, number of unpaid instalments procured over a long period of time and the kind of debts your business takes on. To sum up, to improve your business credit score pay adequate attention to all the relevant aspects.