Did you know that nearly 30% of small businesses are turned down for financing due to poor credit scores?
As an asphalt business owner and contractor, securing the financing for equipment, projects, or expansion is crucial. However, many business owners are unaware that their company’s credit score plays a significant role in financing approval. A strong credit score can open doors to better financing terms, while a poor score may leave you scrambling for alternatives.
More than a number, your credit score could affect your business’s financial reputation in the world. Your score can make or break your ability to get the funding you need, whether you’re paving driveways, laying concrete foundations, or handling challenging roadwork projects. The good news is that knowing and understanding your company credit score is easier than you think!
Learn where to find your company credit score, why it matters, and how to use it to your business’s advantage.
Think of a company credit score as your business’s financial report card. Just as a good personal credit score can help you get a mortgage or car loan, a solid business credit score can unlock higher credit limits, favorable interest rates, and business growth and success opportunities. This is especially crucial for contractors in paving, concrete, and roadwork industries, where big-ticket purchases like machinery and bulk materials are part of the daily grind.
Lenders, suppliers, and vendors rely on your credit score to assess your risk as a borrower. If your score is low, you may face higher interest rates or be denied credit altogether.
A low score could slow you down in an industry that thrives on timely services and significant investments. Operations could be put on hold; worse, a low score could cost you a job. The better your company credit score, the more likely you are to secure financing on your terms, which is a win for your business.
Remember—your company credit score isn’t the same as your personal credit score. Your business score is a separate rating that reflects how your company handles financial responsibilities.
The three central agencies keeping track of business credit are Dun & Bradstreet, Equifax, and Experian. While each agency uses a different method of calculating scores, they all look at similar factors, like payment history, debt ratios, and how long your business has operated.
One of Dun & Bradstreet's most well-known score techniques is the Paydex Score, which ranges from 0 to 100. A score of 80 or higher is ideal and signifies that your business is thriving and paying bills on time. The higher the Paydex score, the more trust lenders and suppliers have in your ability to repay debts.
The first step is visiting a website like Dun & Bradstreet for a free company credit report. You’ll get a basic overview, while deeper insights and more detailed reports are available for a fee.
Once you have your score, scrutinize it. Are there any discrepancies or outdated business information that could hurt your score? Be attentive to details. Incorrect data can lower your rating and impact future financing. If you’ve verified an accurate score, you can move forward confidently, knowing where you stand.
As a contractor in the paving, concrete, or roadwork industries, you’re likely accustomed to needing large sums of money to finance projects, purchase equipment, and maintain a steady supply of materials. A strong company credit score can make all the difference in getting financing on your terms.
A high company credit score gives you leverage when negotiating with vendors and suppliers. They may be more willing to offer favorable payment plans or discounts on bulk purchases. A strong score can open the door to lines of credit, giving you more flexibility to handle cash flow and scale your operations when business is booming.
If you’re struggling to track or improve your company credit score, AK DASH is here to help. Contact us today!