After securing credit for a small business, it's important to manage credit wisely and do so in a way that will allow you to expand your access to small business credit in the future.
After Getting Small Business Credit
Assuming you've just recently been able to tap into small business credit, keep these considerations top of mind to make the most of your small business credit access:
- Effectively manage cash flow - The ability to pay bills depends on the cash that flows in and out of the business. Healthy cash flow is even more important in times of economic downturn when cash is often scarce.
- Pay bills on time - Be vigilant about paying bills on time, every month. Late payment on any bill may have a negative impact on a credit score.
- Only take on debt that helps drive revenues - Besides tightening the reins on discretionary business spending, only take on debt that helps increase revenues for the business. "Good debt" such as purchasing new equipment, moving to a better location or hiring key staff, helps a business grow. "Bad debt" such as buying a new computer when the current computer is working well, adds to a business's monthly financial commitments but does little to up the revenue stream.