By Chaz Lamm
Good credit in a bad economy can be the difference between thriving and not surviving. Good business credit provides cash for expansion, capital expenditures, and staffing when your creditors are contracting due to lack of funds.
Cash flow and liquidity can be enhanced by business credit. A cash rich business can take advantage of time-sensitive opportunities without jeopardizing day to day operations.
Dun and Bradstreet owns the business credit evaluation market in the United States. If you want to play the business credit game, you have to master their court. Placing yourself in position to take advantage of a good credit rating is smart business. Trying to recover from a bad rating is next to impossible.
D&B is a private, for-profit enterprise. You must deal with them carefully to reap the rewards and not have your own information used against you.
D&B Rating measures a company's business credit rating against other companies in the same field. Data is provided on net worth, equity, number of employees, and financial stability and risk. Other factors include age of the company, trade payments, payment history, and public filings.
Dun and Bradstreet earns money by selling this information to banks, insurance companies, vendors, and government agencies.
More and more companies are examining the D&B rating of a vendor before entering into contracts. The cost savings at first from a risky vendor can put large corporations and projects in peril if that vendor goes bust before completion. Dun and Bradstreet help evaluate those risks.
Even if you do not yet need credit to expand your business, you will want to register with Dun and Bradstreet. Even with federal, state, and local contracts, a D-U-N-S number is a basic requirement to bid on most projects.
A D-U-N-S number is required to register in the Central Contractor Registration System (CCR) for federal government contracts. CCR is the main database for the Departments of Defense, Transportation, and Treasury, as well as NASA and others. As of October 1, 2003, a vendor must be registered in the CCR in order to receive contracts and purchase orders from most federal agencies.
To establish or improve your profile with Dun and Bradstreet, the following strategies should help:
1. Update your information at least once or twice a year, or as changes occur within your company.
2. Pay your bills on time. Make it your company religion. Nothing will help your D&B rating more than for other companies to know you pay on time.
3. For a new company, consider paying even before you get the bill. Order. Pay when you receive the products. Your Paydex score is based on how fast you pay, not just paying by the due date.
4. Make sure your company has a business listing in your local Yellow Pages or directory assistance. A business phone landline shows that you are here to stay, even for a home-based business.
5. Establish Equity Lines of Credit (ELOC) before you need them. As Harvey Mackay once titled his book, "Dig Your Well Before You're Thirsty".
6. If you are paying your creditors and vendors on time, make sure those payments are being captured in your profile.
7. While your business and personal credit files are separate, keep your personal credit in good standing. You don't know when a prospective bank or creditor will want a peak at your personal creditworthiness.
Business credit has become a primary method for determining terms of a business loan, lease payments, and insurance premiums. Using your D&B report, companies will determine whether or not to sell to your business, lease equipment, offer a line of credit, or even do business with you instead of your competitors.
Improving your business credit profile will help your company obtain lower interest rate loans, decrease your cash outflow, reduce your insurance premiums, and acquire new customers. You can improve your D&B Rating by monitoring and updating your file online, or hire professionals to assist.
=====
Charles Lamm is a retired attorney now serving as a legal/technical consultant for Accessible Communication for the Deaf in Pembroke Pines, Florida. His umbrella blog can be found at chazlamm.com [http://chazlamm.com].
Article Source: http://EzineArticles.com/?expert=Chaz_Lamm
How to Improve Your Dun and Bradstreet Business Credit Rating
ไม่มีความคิดเห็น:
แสดงความคิดเห็น