Preserve Credit Ratings and Finance Your Business

January 31, 2019 by CNH Finance, LP in category “Financing”

Building and preserving business credit ratings can be a challenge, especially if you are seeking additional funding. However, there is a way to get the working capital you need without taking on debt or further impacting your business credit score.

Avoid Debt Financing

This seems like an impossibility at first blush, but in order to preserve credit ratings, businesses must avoid debt financing. Loans place debt on the books and negatively impact business credit ratings. This makes things extremely challenging for businesses that cannot afford to take on more debt, or that do not have the credit requirements to secure loans in the first place. Because businesses need a reliable source of working capital, single-use loans follow the law of diminishing returns. Credit ratings are impacted and liabilities are placed on the balance sheet, and the result means the next loan amount will be smaller than the last. In order to qualify for better financing, businesses need to preserve credit ratings and avoid debt. The solution is much easier than it seems.

Leveraging Assets for Capital

The way to preserve credit ratings while creating a renewable source of working capital is to leverage assets. All assets owned by a business have value. Equipment, property, vehicles, inventory, receivables, and more have a hidden value which can be used to create a revolving line of credit. Unlike traditional loans, asset based lines of credit allow businesses to preserve credit ratings, while simultaneously avoiding unnecessary debt. Asset based lines of credit provide renewable sources of working capital to businesses of all shaped and sizes, so they can build up credit ratings, reduce liabilities on the balance sheets, and achieve growth much faster than with traditional loans.

Faster Growth

As most business owners know, taking on debt limits one’s growth potential. Since asset based lines of credit do not place debt on the books, businesses can grow much faster. Additionally, as a business acquires more equipment, expands inventory, makes more sales, or acquires more assets, the available financing through the line of credit will also increase. Because businesses can preserve credit ratings with asset based lines of credit, they can position themselves to secure large financing further down the road.

CNH Finance specialized in asset based lines of credit to help businesses preserve credit ratings, sidestep the restrictions of traditional loans, and reach their milestones quickly. Contact our offices today to get started.

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