How Credit Research Helps Ensure Cash Flow 14 Aug 2014

How Credit Research Helps Ensure Cash Flow

Small and medium businesses often struggle to maintain cash flow. Whether you’re in the midst of a sales slump, or your working capital is tied up in new equipment, a new business location or something else, lack of cash flow can kill even a profitable business. You need funds to keep the lights on, to pay your employees, and for a thousand other things. If you don’t have access to liquid funds, staying afloat can be enormously difficult. This is where most business turn to credit, but not all credit is created equal. Credit research is necessary to ensure optimum cash flow and prevent serious problems down the road.

Credit Sources

Businesses have access to a broad range of credit sources. There are banks and credit unions that offer business loans. You might be able to leverage your business credit card for some of your needs. There are also angel investors, speculators and hard money lenders out there. The problem is that not all of these sources are right for your needs, and some are better left alone completely. Credit research helps identify the best sources for your funding needs.

Repayment Considerations

Different forms of business credit come with vastly different terms – varying interest rates, varying minimum payments, varying initial payment dates, balloon payments and more can all wreak havoc on your business during the repayment process. A high interest rate and stiff late payment penalties can spell disaster for even a profitable company. Credit research helps analyze risks and inform your decision making process, ensuring that you’re able to build the cash flow you need without facing significant hurdles and financial challenges during repayment.

Credit Risk

Monitoring business credit is a tough thing to do, particularly for small businesses and sole proprietorships. In fact, your business credit and personal credit might be mixed together if you’re a small business owner and have largely financed the company yourself. That’s not a good thing. Bad business credit will result in less available credit and lower (or no) cash flow. By monitoring your credit risk and history, you can act when the time is right, or take the steps necessary to improve your credit, or disentangle your personal credit from your business credit.

Brand Value

Brand value refers to the value of your business based on its perceived quality with consumers and other businesses. While an intangible thing, it’s nevertheless a significant driver in your quest for cash flow, particularly if you’re seeking business credit from a lender. Credit research can help determine your current brand value, and then help to optimize that value, which increases the actual worth of your company. This makes your firm a more attractive prospect to lenders, and has the side effect of building a more successful company.

As you can see, credit research can have dramatic benefits in your quest for greater liquidity and better cash flow. Partner with a respected, experienced credit research provider and you’ll find success.

– Research Optimus

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