Could your business credit score be holding you back? - Penny Freedom

Could your business credit score be holding you back?

You probably have an idea of what your personal credit score looks like. But do you know your business credit score?

If not, you’re not alone. It is estimated that almost two thirds of business owners have never checked their business credit score.

Yet not knowing it could be holding you back. Your business credit score is what banks and other lenders use to make decisions about lending or investment. It therefore has an impact on your business’s ability to get hold of funding, and the rates and terms if you are approved to borrow.

It could also come into play in your everyday business dealings, such as when you are negotiating contracts or looking for insurance.

How can SMEs show they’re a good bet to lenders?

Knowledge is power, as they say. But for SMEs, even knowing and being able to demonstrate your creditworthiness to lenders can be a mission in itself.

Large corporations bring in big-gun credit assessors to do this, but for a smaller business, doing this simply isn’t feasible – it comes at a massive expense and requires a finance department to administer.

Credit Passport

Credit Passport is a game changer for SMEs to be able to know and prove their financial reliability. It uses real-time bank data to show how the financial system views your business, without impacting your credit profile.

Credit Passport provides a simple alphabetical rating from A++ to E, which is generated from Open Banking data from your bank. This gives an up to date and accurate picture of your business credit profile, while also giving you valuable insights on areas for growth and development.

In short, a good business credit score, issued by Credit Passport reassures banks and other lenders or investors, that you’re a good bet.

Find out your business credit score here

…but what if my business credit score is poor?

First of all, it pays to look at factors that might improve your credit rating, but that’s a topic for another day!

Aside from traditional funding streams like loans and overdrafts, there are other options to consider if you have a poor credit score but you need finance to grow your business. These include equity finance, asset finance and invoice finance arrangements.

Penny falls into the latter category, by advancing cash flow against your unpaid invoices.

How Penny works

Penny’s simple software tells you instantly if we will be able to offer you finance on your invoice.

If it’s a yes, we’ll pay your invoice there and then, while your client or customer pays us when the invoice is due.

The beauty of it is that we’re not interested in either your business or personal credit rating or how long you have been trading, and we don’t ask for any security or personal guarantees.

Final takeaway

Being aware of your credit rating and making efforts to maintain or improve it could be crucial to the success and longevity of your business. But if your business credit score isn’t the best, it’s not the end of the world.

Get in touch with the Penny team and we’ll do our best to help you get the cash flow you need.