WASHINGTON — Small business owners now have a new small business resource to help improve their chances for profitability by understanding the importance and use of business credit. The U.S. Small Business Administration launched a series of training resources designed to help small business owners manage their business credit.
The SBA and Dun & Bradstreet have joined in a nationwide partnership to give small business owners valuable step-by-step guidance on how to proactively manage their business credit. With the training resources, small business owners are advised to take the following five smart steps to establish and maintain a positive business credit file:
Step 1: Start a business credit file — To establish business credit, business owners may need to obtain a D-U-N-S® Number, a unique business identification number, to begin to establish a credit file as soon as they start their business.
Step 2: Establish a credit history — Business owners should put all expenses in their business name and use a commercial bank account to pay bills, rather than using personal funds. This approach will allow business owners to build a history of payment behavior that will help establish favorable credit terms.
Step 3: Pay bills on time — Commercial credit scores are influenced by paying bills on time as well as other factors, such as outstanding debts and company revenues.
Step 4: Monitor and understand their business credit file — Business owners should monitor their credit file before any change occurs that might affect relationships with suppliers, customers and banks.
Step 5: Monitor customer and supplier credit — Business owners can improve cash flow by knowing the credit standing of business partners before agreeing to payment terms.
The training resources include an online Webinar, CD-ROMs, informational brochures and other resources on how to properly establish and protect business credit. Resources and information are available on the SBA’s Web site at www.sba.gov.
The resources are available in English, with Spanish translations becoming available in mid-2008.
“Both the SBA and Dun & Bradstreet have a long history of experience in working with small businesses to maximize their business success,” said SBA Administrator Steve Preston. “These are five smart and easy steps that any small business can implement to establish and maintain good business credit and protect their businesses.”
D&B has worked with business leaders for more than 165 years to provide critical insight and tools to foster growth and protect their businesses.
D&B has a dedicated portal — www.dnb.com/sba/eupdate — for small business owners.