Which Came First, the Chicken or the Egg?
The thing about getting credit if you’re a small business is this: You can’t get credit history unless someone gives you credit. And you can’t get credit unless you have credit history. We know this personally because we’re a small business. We know many other small business owners, and when you’re a fledgling entrepreneur, that lack of business credit leads to endless trade-offs and struggles.
So what do we do? We rely on our personal credit to make purchases or float small loans to grow the business. One month we need to fund some extra marketing, the next month, we have to cover additional expenses that went up because the marketing worked so well. And so it goes. Meanwhile, there’s no separation between our personal and business finances – and our business is NOT building it’s own credit history.
How many great business ideas, even ideas with lots of profit potential, never get far due to a lack of growth capital? According to fundera.com, roughly 50% of small businesses fail by year five. And the biggest reason WHY they fail? A lack of sufficient capital, plus cash flow problems, which sufficient capital would solve.
77% (also according to fundera.com) of small business owners who apply for a loan from a big bank get rejected. That’s just sad, but I get their reasoning. There’s a lack of sufficient business credit history to justify the risk of lending.
Well, there is good news. It IS possible to report business (sometimes called commercial) credit to the credit bureaus, and Datalinx can help. If you’re interested in reporting business / commercial credit, just get in touch with us by phone or email or the form on your right.
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