Business credit is a new thought in the new generation financial activity.
This is a bypass method of establishing a good credit profile along with a great credit score. As the consumer credit score is sometimes ignored, business credit is mostly approved by the creditors and banks. The loan may vary in the range of money, but the convenience level is highly recommended by most of the credit unions. If you are interested in taking business credit, this article will guide you by showing some simple steps to establish a great business credit outline.
The concept that will occupy us next has an extended use, as its name already anticipates, in the commercial and business area.
In the meantime, this is a very common action to appreciate in the aforementioned items.
The commercial credit consists of the offer of credit by a supplier of products and services, to his client, allowing him to pay for them later, that is, in the future. Both agree a date of payment that obviously the client must respect and comply with or otherwise may be subject to legal action against him for not respecting according to the stipulated term.
Also, commercial credit, turns out to be a great resource for those small and medium companies that are just poking their heads in a business and then this credit stands on an excellent investment alternative to give you a boost to the commercial proposal. However, it is important to emphasize that this type of actions will have a certain impact on the finances of the company that buys to pay and therefore must leave it seated in their accounts to avoid future complications when paying. One of them, as noted above, does not have the money at the time that you must cancel the payment.
You should be very responsible and be aware of these numbers so that as we said do not generate from this credit risky financial situations that jeopardize the profitability of a business.
The Commercial Credits are amounts of money in Chilean or foreign currency that the Bank grants to companies of different sizes to meet working capital needs, acquisition of goods, payment of services oriented to the operation of the same or to refinance liabilities with other institutions And short-term suppliers and is normally agreed to be paid in the short or medium term (up to 4 years).
Its difference with consumer loans is related to the flexibility of payment, allowing the payment of quotas to be extended and funds used for the company’s own activities, such as those mentioned above. Likewise, the terms can be short, medium or long, depending on the characteristics of the operation that the borrower wants to develop.
To access this type of financing, companies must provide the bank with extensive information regarding their operations and the income and expense flows they generate, in order to guarantee the payment of the credit that is granted. For the same reason, companies with no commercial history or that do not have third-party audited balances face problems to access this type of financing.
As a way of dealing with this situation, the Superintendency of Banks and Financial Institutions together with the Association of Banks and Financial Institutions has created a standardized information sheet, better known as the FECU-PYME, which allows filling this gap.
The first step is similar to the consumer credit profile.
As the business credit profile owns a name, you will need to make sure the required documents are encrypted with the name of your business. Reporting to the business credit agency is the next task. The reason for reporting is the approval. When the agencies will count the business profile as their part, it will be easier to apply for the credit. The basic theory of applying for credit again and again is the loyalty. If the bills are regularly paid, the creditors will allow the business profile to lend more money.
The contact number is a mandatory requirement for establishing business credit profile. If there is any kind of domestic numbers such as cell phone or home phone number, the agency will count the business profile as “flagged”.
This is surely an immature sign in business lines.
The credit providers have a big research team. They will search about the business over the internet. So, you will need to build a virtual profile of your business in the shortest period. The instant email reply will please them with the term of professionalism.A perfect email address is important in this sense.
The address of the business company is really sensitive.
There is a mistake of filing a non-matching address causes more difficulties in getting credit. Again, when you have an application pending for business license, try not to shift the business place all of a sudden. The license will give you the confidence to run the business legally.
You can start funding for your business with a small credit card. This initial card is called Vendor Credit. When everything is completed, you are able to get business credit. Firstly, you will need SSN and then contact with DUNS to get business credit in your business approach.
Small and medium-sized businesses sometimes need to apply for credit to maintain, expand or improve some aspect of their business. This type of financing is called commercial credit. The agents involved in this type of transaction are two: the company applying for the loan and the bank that establishes a series of conditions to grant it.