Every business wants to grow, but when your business involves providing credit terms or delivering goods and services before payment, it can be tricky to determine which businesses to work with and which to decline.  Historically, some large corporations have been wary of taking on small business clients who can be notoriously hard to evaluate due to having little or no information available on their credit files. Also, small businesses tend to be a volatile group – 49% fail in the first 5 years of operation. 

So, what’s the best way to find solid small business customers?  We recommend a 3-fold approach –

• Use blended data – a combination of business data and personal data on an owner or principal.
• Incorporate automated decisions that automatically approve accounts that meet your credit policy criteria and decline those who don’t. Manual review is reserved for middle-ground accounts, which saves you resources.
• Regularly monitor the health of our client portfolio with scoring and alerts.

Learn more by downloading our whitepaper with CFO.com , “A Widening Focus, Setting Your Sights on Growth Companies.”

Are you a small business owner or do you know one? At FinovateSpring 2012 this morning, we announced BusinessIQ Express, an exciting online tool designed to help small businesses keep the cash flowing by helping them make smarter decisions about the businesses they work with. The tool helps users:

• Evaluate prospects, customers, suppliers and partners on their likelihood to pay on time
• Monitor business relationships via alerts and notifications of key changes
• Collect on outstanding debts and avoid future losses

In addition, it houses a library of tutorial videos and educational information including whitepapers as well as live customer service – everything a small business needs to make informed, insightful decisions. 

BusinessIQ Express is a complete package for one compelling price! (There’s even an option to user limited services as a free member.)

The kids are back to school. Now it’s time for you to get back to business and focus on building what’s best for growing your small business, including a good business credit rating. 

Remember, your company’s business credit information is one of the first things lenders, suppliers and others will look at before deciding to do business with you. If it’s strong enough, it can even help you avoid personal guarantees.

Improving your business credit rating can make it easier for your small business to get loans and lines of credit, or improve your existing credit terms. Furthermore, it can lower your interest rates and insurance premiums to help your business save money. 

In short, it’s time to get back to business and focus on making your business credit work to your advantage… Take the time to know it, protect it, improve it and build it.

It was hardly possible to go a day over the past few months without hearing about the squabbles in Washington D.C. regarding the debt ceiling and the budget deficit.  Thankfully the issues have been resolved, albeit temporarily.  I thought I would take a moment to draw the corollaries that this debate has with the small business owner’s daily business management activities.

When the U.S. government needs money to cover its expenses, it can go to the open market and sell debt instruments (mostly notes and bonds) to individuals, organizations and foreign governments.  The U.S. has a very strong credit rating, which allows the government to sell these notes and bonds at a relatively low interest rate (compared to other governments and corporations).   This low interest rate makes the activity of selling debt, also known as borrowing money, lower cost to the tax payer—who is ultimately responsible for paying off these federal debts.

At the core of the D.C. debate was whether the government should allow itself to borrow more money to cover its deficits.   One of the direct impacts of this decision is whether the U.S. will continue to be rated well by the credit rating organizations.  A drop in this credit rating means that the government will have to pay higher interest rates to the people, companies and foreign governments that want to lend money to the U.S.  These higher interest rates become a bigger burden on the U.S. tax payer.

This is not that dissimilar to the daily activities of a small business owner, who must manage their cash flow to cover all of their costs.  Paying bills on time impacts their business’s credit rating in virtually the same way that the U.S. government’s actions impact its credit rating.

The credit rating for the U.S. government’s debt is issued by the credit rating agencies such as Moody’s, S&P and Fitch.  The credit ratings for businesses are issued by organizations like Experian.  Just as the Washington debate could have had cost implications to the U.S. borrowing program, the payment activities of small business owners can directly impact their access to affordable financing for their business.  Companies with high credit scores generally receive more favorable financing terms than those with lower credit scores.   These favorable financing terms result in lower borrowing costs to the business, leaving more profit for the business owner.

To learn more about commercial credit risk, please visit www.businesscreditfacts.com

You’ve got a great idea, the capital and the know-how to make it happen. Yet entrepreneurial success also depends on something else many small business owners don’t pay enough attention to: your business credit profile.

Here’s a tip! Just as your personal credit rating has a big impact on your financial health, your business credit rating can help you get competitive business loan rates and terms. Having complete, up-to-date information on your business credit profile can help improve your credit rating…and maintaining a good credit rating is the best way to obtain favorable financial terms.

To obtain a recent copy of your business credit profile online, and to make sure it’s updated with accurate information on your business, visit BusinessCreditFacts.com. Click on the orange button that reads “Update my report”.

In the past month there have been two  Google services that I’ve been keeping an eye on. 

First was Google+.  I’m happy to say that I’m one of the 18 million users on the newest social media network.  The first week it came out, I was asking everyone I knew for an invite!  I was so jealous of people who got to play around with the “circles” I had been hearing  about.  Now that I’ve been on the network for about a month, I’m intrigued by what the service can do for the SMB sector.  I’m not saying it’s better than FaceBook, or any other network, but it’s getting more and more popular every day – you don’t want to miss the wave.  The G+ team has asked business owners to not create profiles yet, as the full program for businesses will be launching later this year. However, I would suggest you sign up, create a profile, test out the circles by adding friends, join conversations, and try promoting your business with G+.   If you need an invite, let me know.  Leave a comment and I’ll make sure you get one.

The second service was Google Sites’ for mobile sites.  It’s a new tool that allows any business to easily create mobile-friendly websites!  This allows the small business who may not have the resources to have a mobile presence the ability to provide valuable info to potential and existing customers.  Give it a shot, you may be surprised at how well it works.

Last time, I wrote about the importance of understanding your portfolio’s exposure. Let’s get a little more specific and evaluate things from a disaster perspective.  FEMA reported that there were 81 declared disasters in the U.S. last year. This year, we’ve already experienced 50 disasters. According to the American Red Cross, “as many as 40% of small businesses do not reopen after a major disaster.”

Since many businesses don’t have disaster recovery plans, you could be directly impacted if a power outage, flood or hurricane should strike the accounts in your portfolio. So perhaps, it may be a good idea to review these questions when evaluating your portfolio: 

• Which states are most of your accounts located?
• Are any of these states high risk disaster areas?
• For those accounts that have a potential risk of disaster, what is the amount of exposure you have with these companies?
• If a disaster should strike, would your company be able to recover?

Although you can’t prevent disasters from happening, you can come up with a plan to try to protect your business. Look for future posts from me, and let me know if there are any specific topics about managing your portfolio that you’d like to see.

Credit reporting companies require a minimum amount of information on your small business before they can generate a credit rating for your business. The process of scoring your business can include more than 200 factors into its model. To build a business credit history and rating, encourage your suppliers or vendors to report your company’s payment history to Experian’s business database. You can download an easy-to-use letter template located here, and send your request to your current suppliers.

There are many varying answers to this question, including one that often gets overlooked…. We all know that a prime factor for business success relies on being able to generate customers, and generating customers often means having the business capital and financial means required to market effectively to those customers. So what’s an important “To-Do” to have a successful business? The answer should include: Monitor and maintain a healthy credit score! Why? Because a good small business credit score will grant a growing business the best financial terms and capital to help you gain customers. Want more? Here are four compelling reasons to monitor your business credit:  http://www.businesscreditfacts.com/pdp.aspx?pg=faq-19&lsv=www

Unlike personal credit information, which is regulated and can be viewed only with the permission of the report holder, access to business credit is not as restricted. Business credit information is available to anyone for any reason, including customers, competitors and suppliers. This makes it imperative to monitor your business credit on a regular basis and proactively manage it. Outdated or incorrect information can give the wrong impression about your business, resulting in unfavorable decisions by potential lenders and creditors – which can negatively impact your bottom line. Plus, if your business has grown or changed over the last year, it’s important to update the data reflected in your report. It can help your business reputation. For more information on how to update your business information, visit www.BusinessCreditFacts.com.