Running a successful small business goes beyond profit margins; it’s about managing financial health. One crucial metric is your business credit score, according to the team at Thriday.
Thriday’s latest feature – the business credit score check aims to address key requirements.
As explained in a blog post by Thriday, business credit scores are the financial heartbeat of your company.
Much like a personal credit score, it reflects your business’s creditworthiness.
Lenders use your business credit score “to evaluate how creditworthy your enterprise is.”
As stated in the update from Thriday, the higher your score, “the more favorable terms and conditions you can secure for loans or credit.”
It’s not just a number; it reflects your business’s financial integrity and reliability. According to recent studies, businesses with higher credit scores “are 20% more likely to secure favorable loan terms, underscoring its significance in financial dealings.”
Understanding the mechanics behind your business credit score is important.
Multiple factors come into play, each with a different degree of significance. While payment history is a significant contributor, credit utilization, public records, repayment history and other financial behaviors also “play a role.”
Notably, payment punctuality holds “the biggest weight, contributing to approximately 35% of the score.”
By comprehending this formula, you gain actionable insights “into areas of improvement.”
The road to financial improvement begins “with tracking, and Thriday makes it easy for you to do that.”
Regularly checking your business credit score “is essential, yet many entrepreneurs fail to pay regular attention to it.”
Thriday’s free service offers a seamless experience, “allowing you to promptly monitor changes and address issues.”
Thriday is a tool for small businesses, “as besides providing your business credit score, it includes a range of features designed to eliminate the time business owners waste on financial admin.”
Thriday’s key features include bill manager – which “automates bill payments to ensure your suppliers are paid on time.”
Thriday also has BAS and tax lodgment, “ensuring you keep up with your taxes when they are due.”
Finally, Thriday generates detailed accounting reports, “ensuring you know exactly how your business performs to avoid cash flow shortfalls.”
These features make your life easier and can help you maintain a good credit rating.
With services like CreditorWatch, business credit scores “are ranked A to F and 0 to 800 in Australia, and anything above 700 is considered excellent.”
Businesses in this bracket enjoy preferential terms from lenders. Thriday helps you understand your current score and provides insights “on maintaining or reaching that coveted fantastic range, ensuring your business stands on solid financial ground.”
Thriday not only diagnoses your business credit health but also “helps you understand the reasons behind it.”
To support your business, Thriday will highlight “where you rank currently and what you need to do to improve your score, providing a roadmap to boost your creditworthiness.”
To improve your score, the basics matter. Timely payments play a pivotal role, so “ensure you consistently meet all financial obligations, from vendor payments to loans.”
Thriday offers valuable resources and tools “to guide your improvement efforts, providing personalised insights and actionable steps to boost your business credit score over time.”
A low credit score can be particularly “detrimental to a small business, impacting its financial health and growth prospects.”
As explained in the update, securing vendor partnerships and negotiating good terms may “become challenging, as suppliers often review credit scores before establishing business relationships.”
The inability to access credit can hinder small businesses’ ability “to invest in essential resources, expand operations, or navigate unexpected financial challenges.”
Thriday has established an alliance with CreditorWatch, a credit reporting agency, “to deliver precise and reliable business credit scores to its clients.”
This collaboration ensures Thriday users access the most accurate and up-to-date credit information, “empowering them to make well-informed financial decisions.”
This partnership enhances credit reporting accuracy and reinforces Thriday’s commitment to transparency and reliability in “providing valuable insights to businesses seeking to understand and optimize their credit scores.”