How Taking a Small Business Loan Can Improve Your Business Credit Score
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How Taking a Small Business Loan Can Improve Your Business’ Credit Score

You hear it on television all the time nowadays – buy this product and get 0% APR! Zero interest for however many months! These commercials are designed to encourage you to buy a product, but they are also trying to get you to take a loan.

And a good loan relies heavily on your credit score.

Your credit score is a financial metric used to assess a person’s fiscal responsibility. Banks, credit unions and lenders use it as a way of mitigating their own risk. It is not just people who have credit scores either; corporations of all shapes and sizes do too. Although many business owners aren’t aware of the benefits of their company’s credit score, they’re well-documented and arguably essential to a flourishing business. Let’s peer into the benefits of good credit scores and one of the best ways to raise it: taking small business loan.

Business Credit Scores are Public

And they’re available for low prices, too. Literally anybody can log online to sites like and find any registered business’ credit score. Remember, your credit score is attached to your business reputation. If a customer looks up your credit score, and are unimpressed, you might miss out on business opportunities from people who do not think they can trust you. As such, maintaining high credit scores is vital for small business owners.

Why You Need a High Credit Score

Better financing terms Small businesses with high credit scores demonstrate low financial risk to lenders. As such, they’re able to receive better financing terms than organizations with low credit scores. Easier access to business facilities Landlords and property management companies perceive businesses with low credit scores as unreliable. If your small business possesses a high credit score, you’re likely to find leases and rental agreements more easily than those with less-than-positive scores. To nix requirements of down payments and security deposits Many owners of property require down payments on financing agreements, loans, and mortgages. Similarly, sellers and renters of equipment, buildings, and other assets often ask for security deposits to help cover their finances in the event of default. Having a high credit score for your small business will save your organization’s limited working capital through virtually eliminating needs for these up-front outlays of cash.

Small Business Loans Directly Boost Credit Score

By paying installments on a Small Business Loan on time, you are proving your business’ financial responsibility. These helpful loans will boost business relationships, too. Bankers are more open to doing business and vendors and suppliers are always looking for an owner who they can trust with money. A Small Business Loan also establishes credit history, beefing up your credit score with every payment and providing financial responsibility to interested parties. Taking out a Small Business Loan will improve all three of your credit scores through Dun & Bradstreet, Equifax, and Experian, the three major credit bureaus for businesses. So, if you are looking for smart financial directions for your small business, start with a Small Business Loan.

Interested in acquiring a Small Business Loan to put your company on the road to success, all while improving your credit score? Contact one of our funding specialists today at 877-880-1106 or  APPLY NOW!  Also, be sure to check out Excel Capital Management’s Managing Partner, Chad Otar’s advice on increasing business credit in Fit Small Business’ latest article: Increase Business Credit: 12 Expert-Tested Tips

Alex Briggs is a contributing writer and media specialist for CreditSoup. He regularly produces content for a variety of business and personal finance blogs

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