When a crisis emerges, businesses that do not have a lot of funds may wholly rely on credit from the lenders to be stable. Small businesses are the ones that are likely to face such a situation since they do not have enough emergency funds set aside in comparison to the large company business. Advice is given to the business owners to ensure that the business credit is well built. Some companies that help build business credit with no personal guarantee are best to use for your business success. This business credit will help you push through the crisis time so that you can successfully operate. Below are ways to guard your business credit in times of crisis.
1. Keep in contact with your suppliers
Your buyers and suppliers face credit problems just like you during a crisis. When such an incident erupts in a business, it is good that you organize a meeting with your suppliers in order not to break the supply chain communication and think about the solutions together. Keeping in touch with your buyers, lenders, and suppliers often establish a mutual ground where you can agree on paying off later.
2. Create relationships with local banks
It is good to build your brand integrity and allocate enough time to establish a real and credible relationship with your banks. When comparing national banks to the local banks, a local bank is more forgiving. When you create a good relationship with your local bank, it pays off in large amounts of debts building up in times of crisis. The local bank has a dramatic effect that is more than the time spent in reinforcing the relationship.
3. Have enough lending relationships
Establishing a relationship with your bank is essential to the growth of your small business. Nonetheless, lenders change their credit needs for a lot of reasons best known to them. Having only one lender is not safe. It is best if you have several lenders so that you will be able to find other sources of solutions, in case your relationship with the bank falls short. It is always advisable to have enough options.
4. Notify creditors early
In the event of a crisis, lenders have rules to defer payments by borrowers who present a request late. It is good to communicate with the lenders very early to know how they can help you navigate through the difficult times. If you hold back until its late leave alone being very late, it may be too late to have a good payment work done.
5. Be open about your needs
During an economic, political, or even social crisis, lenders always harden their funding ways. However, with strong business credit, it comes in to show the vendors, suppliers, and partners of your business creditworthiness. Hence you can access credit. Share with your suppliers if you are facing any problems and pay off your bills on time. In return, they will be ready to work with you by handing out extensions or even discounts.
6. Meet your promises
In a time of crisis, your vendor’s customers are also facing the same problem you are facing. Therefore, keep updating them on how you are faring on. In case you require payment terms, ask for them and be straight forward on how and the time you can get back to the original terms after the crisis. Above all else, ensure you heed to the new terms and agreements set by the bank. Do not skip a payment, or you might lose trust, and worst of all, you can be cut off.
7. Look out for hints of fraud and spot theft
As you safeguard your credit, it is good to be more observant about the charges of fraud and identification of the thief. Have a rule of always giving an eye to your charges and filling in a report immediately, you fail to recognize something. In case you are not able to carry out this by yourself, you can give out the work to somebody else. In this way, they will be able to look for hints of fraud with much ease than you could.