Small Business Owners Urged to Check Company’s Credit Reports

Millions of Americans know all about just how much their credit reports and scores can impact many aspects of their financial lives, but what they might not know is that this is also true of companies when they own a small business.


Small businesses, like people, typically have credit standings after their owners have obtained credit in their names, and it is for this reason that it’s important for entrepreneurs to keep as close an eye as possible on these documents as possible, according to a report from The Associated Press. While many owners may have to use their own credit standing to obtain financing for a company initially, once they have done so for the first time, the business itself will then have a credit history that lenders will use to determine whether they should be eligible for credit (however, it should be noted that in a lot of cases, lenders will continue to evaluate both the standings of both the owner and the company itself).


Jeff Stibel, the chief executive officer for the small business credit scoring credit scoring firm Dun and Bradstreet Credibility Corp., told the agency that most owners are typically not aware of these documents, however, the report said. Often, they only learn of their existence after receiving a rejection for financing from a lender, which can certainly serve to set many owners and their companies back on their heels. But as with consumer credit reports, it’s important to owners to keep close tabs on these documents as a means of ensuring there are no inaccurate or unfair entries listed in a company’s name, as well as determining whether all information is complete. Disputing any information that isn’t recognized might  help to solve these issues.


Of course, where businesses are concerned, lenders might be able to look beyond their credit standing specifically, in a way they cannot for consumers themselves, the report said. If companies are performing well and banks are more familiar with what they do and where they’re going, they might be a little more willing to extend financing despite diminished standings.


Before seeking such financing, however, owners may want to consider the ways in which their small business insurance policies are effecting their bottom lines. By looking for less expensive alternatives to their current liability insurance plans or other such policies, they may be able to save a little bit of money and reduce their reliance on lending overall.