Why Building Business Credit is Crucial for Business Owners

Building Credit for Your Business

Why Building Business Credit is Crucial for Business Owners

According to the Small Business Administration, there are over 28 million small business owners in the United States, and it’s important to establish a good financial reputation to obtain the necessary funding and support. In this article, we’ve collected ten eye-opening statistics that explain why is business credit important and crucial for small businesses.

10 Eye-Opening Statistics for Small Businesses

1. Impact of Lack of Funding on Small Businesses

27% of businesses surveyed by the NSBA claimed that they were not able to receive the funding they needed. For those 1-in-4 businesses, the most frequent primary impact that a lack of funding had was preventing them from growing their business.

2. Personal Credit Card Usage Among Small Businesses

46% of all small businesses use personal credit cards, which makes it difficult to separate personal and business expenses. This finding was revealed through research conducted by MasterCard.

3. Business Credit Denial Rates and the Importance of Establishing Good Credit

According to the NSBA Small Business Access to Capital Study, 20% of small business loans are denied due to business credit. Establishing business credit is essential to obtain funding and support from lenders.

4. Demand for Business Credit Reports and their Essential Role

In the first six months of 2013, Creditera found that Dun & Bradstreet had 45 million business credit report requests and Equifax Commercial had 35 million. This statistic shows that business credit reports are in high demand and essential for businesses.

5. Lack of Knowledge about Business Credit Scores among Small Business Owners

The Nav American Dream Gap Survey, 2015 revealed that of small business owners surveyed, 45% did not know they have a business credit score, 72% did not know where to find information on their business credit score, and 82% didn’t know how to interpret their score. These findings highlight the importance of educating small business owners on how to establish and interpret their business credit score.

6. Significance of Business Credit Score for Small Business Loans

Small Business by Demand Media, 2015 reported that many lenders consider a business credit score of 75 as “acceptable,” making it harder for those with a lower score to get a small business loan. This underscores the importance of establishing and maintaining a good business credit score.

7. Timeframe to Improve Business Credit Score

The average business needs 12-18 months to improve its business credit score, according to Cardhub in 2015. This statistic highlights the need for small businesses to establish good credit early on to have a better chance of accessing funds when needed.

8. Funding Sources for Small Businesses and the Need for Good Credit

Bolt Insurance found that one in three small business owners borrow money from family and friends, while 75% of young firms’ funds come from bank loans and business credit. This statistic shows that businesses need to establish good credit to access funding from reputable lenders.

9. Importance of Business Credit for Success Among Fortune 500 Companies

Dun & Bradstreet states that 90% of the Fortune 500™, and companies of every size around the world, rely on their data, insights, and analytics to streamline operations, manage risk, improve targeting, find quality leads, boost customer relationships and – most important of all – grow. This finding shows that having good business credit is essential to be a part of this elite group of successful companies.

10. Small Business Credit Card Spending and Need for Establishing Good Credit

According to Mercator Advisory Group, small business credit cards account for $430 billion in spending, or about 1 in every 6 dollars spent on general-purpose cards. This statistic shows that businesses rely on credit to cover their expenses, making it important to establish good business credit.

In summary, building credit for your business is vital for small businesses. Banks, lenders, and suppliers rely on business credit reports to assess a company

Build Business Credit with The NET 30

Ready to establish and maintain a strong business credit profile? Take control of your financial reputation with The NET 30, the ultimate business credit management tool. Sign up today and gain access to comprehensive credit reports, expert insights, and personalized guidance to help you secure the funding and support your small business needs to thrive. Don’t let lack of funding or credit denial hold your business back – take action now with The NET 30! Click here to get started and pave the way to a successful financial future for your small business.


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