Business Funding

3 EASY Steps to Help Your New Business Secure Funding

In today’s economy, it has become a daunting task for new  and small businesses to access the capital they need to launch and grow their  companies.  Being forced to make personal  guarantees and to use personal credit to fund a business adds a great deal of  risk and pressure on the business owner.   While there are several alternative funding methods out there, none are  more lucrative than those offered by the traditional lending institutions;  banks and government.  So why not just  walk in to your nearest bank, extend a hand, and walk out with cash? These  traditional sources have stringent application processes that make it more  difficult to qualify for loans.  But,  this doesn’t mean you need to head down the block to your nearest loan shark  for a business loan.  By following these  3 simple steps, you can help get your business into the correct position to  secure funding:

    1. Establish  your Business Credit File – Establishing Business Credit doesn’t happen  spontaneously. Companies first must obtain their D&B® DUNS number; a  unique 9-digit number which is the industry standard for keeping track of the  world’s businesses.  Think of a Social  Security Number for your business.  Once  a business receives its DUNS Number, a D&B credit file, in conjunction with  the DUNS Number, begins to compile scores and ratings from collecting financial  data and payment history.  This credit file  is what the banks and other major lending institutions use to assess and  qualify your business for loans.  With a  D&B Credit File, business owners now won’t need to solely rely on their  personal credit and assets as collateral for loans.

 

    1. Secure a  good Rating with D&B – So I have my D&B Credit File. I’m ready for  funding!  Right? Not quite!  The majority of businesses already have a  DUNS Number and credit file that they received when they registered for a NAICS  or SIC Code.  The file is just incomplete  or inaccurate. In this case, there are two ways to ensure your credit file is  accurate and strong:
      1. Make sure your vendors are reporting trade  history to Dun & Bradstreet
      1. Make sure you have good trade history reportedOf the over 500,000 companies that  provide credit to businesses, only about 6,000 of them report their purchase  transactions with D&B and the other business credit bureaus. So chances are, the vendors you have the best financial  relationships with may not be reporting them.   By accessing your business credit file and reviewing and/or submitting  trade references for approval, you can be confident that your good payment  history will be compiled and accurately reflected through your D&B scores  and ratings.

 

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  1. Continuously  Monitor Your Credit – Business Credit ratings fluctuate frequently.  Make a late payment to a vendor, or change  your term length, and it can impact your scores.  And, on occasion, your scores can be impacted  by errors in your vendors’ reporting.   That is why it’s imperative to stay on top of your business credit file  with year-round monitoring and alerts.

For more information about building business credit, and to  take your first step towards a stronger credit file, visit the D&B  Credibility Corp. CreditBuilder page today.

  ABOUT THE AUTHOR:
StartupNation
StartupNation

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