Bad Credit Business Financing: Habits that can Protect your Credit Score
For business owners who have bad credit, the task of raising cash flows, planning and allocating financing and getting capital in order to grow can be made a lot more difficult. Figuring out how to grow business while conserving capital takes time, thought and energy, but at the same time business owners have a responsibility to themselves to work on improving their credit score. In order to create a passive framework that allows them to move closer to financial stability, adopting positive habits is something that business owners should work on and make time for in their schedules.
When taking bad credit business financing products, have a plan. A big mistake for business owners is taking on obligation without a plan on how to create positive ROI. Often times, bad credit can come from financing business expenses with credit cards or business loans without a backing of sufficient market research or cost analysis, teaching a painful, but ultimately valuable lesson. In business, arbitrary use of financing will only very rarely result in a positive. Bad credit can also come from causes unrelated to business expenses, but in this case business owners should still allocate their business funding responsibly to avoid compounding on or creating new problems for themselves.
Stay on top of your cash flows. A business owner should never be afraid to take the pulse of their company by reflecting on cash flows. In fact, getting in the habit of regularly looking at their books is one of the best things that they can do. Not only should business owners know what they are spending money on and how much is coming out of the company in the forma of salaries and expenses, but they should also be aware of how much liquid capital is available to them in order to know instantly if they are able to act on opportunities that present themselves. It’s often the case that great deals, partnership opportunities and potential new clients will seemingly appear out of the ether, so knowing where your business stands and whether or not you are able to act is important.
Set up automatic payments for essential services. For things like bills, employee salaries and even rent for commercial spaces, it may be in your best interest to set up recurring automatic payments. The reason for this is that, should you forget to make payments on time, you can further damage your already bad credit. A word of caution, however. Should you divert funds from your bill paying account, you should ensure that you have at least enough in it to avoid missing your payments, otherwise the purpose of setting this up in the first place is missed.
Be proactive while monitoring your marketing. Paid marketing can bring in a lot of business when it is properly managed, but since many ad services nowadays run on a cost per impression or click basis, negligence can result in a budget being sucked up with little to no result. Keep a close track of any paid marketing channels you are using, and avoid keeping things on auto-pilot for too long, since conditions change rapidly in the digital world. You should also keep a close watch on your demographic and their preferences in order to ensure that your targeting efforts are as close to the mark as they can be.
Photo Credit to Laura D’Alessandro on Flickr