Corporate Credit and Why You Need to Build it

For any business, large or small, corporate credit is one of the most invaluable sides of your business to take care of. Whether it’s arranging unsecured lines of credit or simply canceling the need to use your own personal credit cards, there’s no doubt that corporate credit offers an essential way to manage your business finances more efficiently.

What is Corporate Credit?

If you’ve never had corporate credit – or even heard of it – then it can be confusing. Yet the benefits of it are numerous, therefore it’s worth getting to know just exactly what corporate credit means and how it can help your business.

The simplest way is to consider it as credit for your business. In the same way that stores and banks offer you personal loans to make purchases without paying for them immediately, corporate credit allows your business to both make purchases and control your financial outgoings. It also helps you build your financial reputation in the eyes of your suppliers and creditors.

Benefits of Corporate Credit

There are numerous benefits to setting up a line of corporate credit. These include:

  • Able to extend your cash flow

  • Meet current financial needs and plan for future commitments and needs

  • Access to funds when you need them most

  • Lower interest rates

  • Business credibility to those you deal with

The ability to lower your interest rate is perhaps one of the more beneficial results of getting corporate credit, as this can quite literally save you thousands annually. Unfortunately, like any type of credit, not every company will be eligible for it – what then?

Aged or Shelf Corporation

If your business is relatively new, it may prove hard to be approved for any kind of corporate credit. Even unsecured lines of credit may not be open to you. Therefore, you need an alternative if you want help managing your business finances.

An aged corporation – also known as a shelf corporation – could offer you the type of service you need. Even if you’re a new start-up, an aged or shelf corporation will allow you to look as if you’ve been trading a lot longer. This in turn will give lenders more confidence in your company – they are more likely to lend to an established company as opposed to a new one.

How Does an Aged Corporation Work?

For any business that has been trading less than 6 months, an aged or shelf corporation is the ideal solution to attaining corporate credit. This is due to the ready-made nature of an aged corporation.

Because these types of corporation have no business activity, liabilities or assets, they offer several benefits:

  • Immediate history

  • Ability to bid on state contracts

  • Obtain both secured and unsecured lines of credit

There are obviously stipulations involved if applying to take over an aged corporation, or applying for corporate credit if you already have a business history. This is where you should seek out the advice of experts in this area.

Companies like B2B Credit Source and others can offer you impartial and unbiased expertise when it comes to helping businesses understand corporate credit. Additionally, they can explain whether you would be eligible for corporate credit or if an aged corporation would be a better solution. With expert advice, your chances of securing lines of credit can increase dramatically.

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