Open Forum is an American Express sponsored site with helpful information for business. In one of your calls or notes to your existing business customers, you might recommend it. Go take a look.
In a recent article, Building and Protecting Business Credit, they covered 5 steps and then offered a Credit Worksheet a business can use to assess their credit and take steps to improve it.
Their 5 steps:
- Demonstrate good debt management skills
- This includes building a credit history and using the right kind of debt for the circumstances.
- Use the right financial tools for the job
- Compares use of business charge cards, lines of credit and term debt.
- Understand Lender’s Guidelines
- You’ll recognize these five C’s: Character, Capacity, Collateral, Capital and Conditions. (In my tax return analysis training, I show you how you can learn more about each of the 5 C’s just by looking at their tax return.)
- Minimize bad credit risks
- This includes monitoring your customer’s credit-worthiness as well as your business partners and associates
- Separate business and personal credit
- Although they acknowledge that with small business financing, the lender’s will consider both.
They also include a sidebar on understanding your company’s credit report.
Here is an idea. Develop your own ‘white paper’ on how businesses can protect their business credit in tough times. Or, if your bank or credit union is nervous about putting that kind of advice in writing, find a good article that covers the same. Copy it and put it with a handwritten note in an envelope and mail it to your business borrowers.
What are you doing to reach out to business borrowers? How do they feel about it?