In our last blog, we confirmed that your personal credit score can affect your company. We highlighted the fact that a person’s personal credit score can impact his/her ability to secure funding from a bank. As we pointed out, business owners require funds for a number of things. In today’s blog, we’ll focus a bit more on some of the most important and how poor credit can impact securing them.
It is harder to order inventory.
What does your company sell? Without product, you’re not going to generate any revenue. That part is obvious. With a poor personal credit score, a bank isn’t likely to loan you the money to buy your inventory. However, as Meredith Wood points out on AllBusiness.com, lenders aren’t the only ones checking your personal credit score. Many inventory providers also look into credit histories to assess how much they will charge their clients.
“For instance, utilities will look at your credit score when you request services,” explains Woord, “They may even ask clients with bad credit to pay an additional deposit. The same goes for real estate companies, which run the very real risk of having clients pull out of leases early or defaulting on scheduled rent and maintenance payments.”
You are given higher insurance premiums.
No matter your business type, you need insurance. As you know, all insurance policies require monthly payments. If an insurer looks into your credit history and discovers that your credit score is low, it may result in higher premiums. Just like a bank, an insurance provider needs assurance that payments will be made on time. On Bankrate.com, Jacqueline DeMarco explains that insurers also take into account how likely you are to file a claim.
“Although credit scores and credit-based insurance scores are slightly different, your insurance score is still affected by your credit history as it takes into account your payment history, outstanding debt, credit history length, new credit and credit mix just like a credit score does,” she informs, “Typically, the higher your insurance score, the lower the rates on your policy will be.”
Car loans will be more expensive.
Most businesses have company vehicles. If you’re looking to purchase one, your personal credit score should be stellar. If it isn’t, your car loan is likely to have a high interest rate. DeMarco reveals that your credit history will play a role in both whether you can get your hands on a loan and what kind of rates you’ll receive.
“If you have strong credit, you may be able to find auto loan offers with interest rates as low as 4.19 percent,” she notes, “On the flip side, if you have a low credit score, you may be facing interest rates as high as 20 percent.”
Synergy Merchants makes it easy to get cash even with a poor credit score!
Our unique merchant cash advance program enables all types of business owners to get their hands on much-needed extra working capital. Regardless of your credit history or length of time in business, you can be approved in less than 24 hours! For more information, please don’t hesitate to call Synergy Merchants at 1-877-718-2026 or email us at firstname.lastname@example.org. You can also apply online for a free, no obligation quote!