If you’re looking to get a loan or any type of financing for your business, one of the first things the would-be lender will look at is your business credit report. These reports differ from personal ones in that they are collected by multiple independent bodies, and the information gathered might not be accurate or complete. Confused? Read on for help with getting your accounts in order.
Who’s behind my business credit report, anyway?
In the U.S., there are many different institutions in charge of gathering credit reports for business. They’re not exactly ran by the government as is the case with personal credit reports, meaning that the data they collect is optional to have – that is to say, they won’t send you the report on their own accord but will instead charge you for it on an as-needed basis.
Yes, paying for a credit report for your own business doesn’t sound all that great, but it’s a necessary step towards getting the financing you need. Moreover, there are over half a dozen bureaus collecting these reports – you’ll need to find out which bureau is preferred by the bank you’re in talks with and get your credit report from them. While reports from every institution are generally accepted, most banks will tend to favor one or two of their own choosing.
Since you’re paying for the report, you’d expect it to be all-inclusive and have all the necessary and correct information. Not the case – most often, the job they do will be incomplete (or even downright inaccurate) since they gather info by themselves. Check your business report closely and look out for any inaccuracies – you’ll have to supply them with additional information in order to get a correct and complete report, which brings us to…
Working with an accountant
As a business owner, you should always aim to have a solid relationship with your accountant no matter the line of work you’re in. Sometimes, smaller businesses won’t pay too much attention to supplying their accountant with all the information possible – if you’re a rug cleaner, you might feel that number-crunching and report-gathering is better left for larger businesses with many more employees and bigger earnings.
Of course, you’d be wrong in thinking that – even the smallest business needs to supply its accountant with ample data on a regular basis. When it’s time to get your business credit report (most often to get that much-needed loan in order to reach the next level), you’ll be thankful that you gathered your info carefully over the months and years.
If you’re unsure of the kind of info your accountant needs for credit bureaus, go ahead and ask – a little forethought will save you a lot of effort later on, as trying to gather all the necessary information going back for what could be years is definitely a chore (not to mention that your accountant might charge you extra for assistance). While not as menacing as filing taxes, collecting data for business credit reports should be done with equal amounts of diligence to avoid those pesky hiccups on your way to expanding your business.