When you have the ability to get money financing with the best interest or bank rates available , such as interest on a new car, a property or property for investments, this brings many money savings to interest rates and some rates .
As a business owner or small business, having good credit rating instantly provides a quick money leverage because the credit score makes it easy for you to potentially qualify for various types of business financing.
However, the use of personal credit alone does not allow an entrepreneur to maximize the true funding potential that a business needs on its journey of growth and success.
When it focuses on building its credit for its small business, the business itself establishes its own credit score with the bureaus Serasa Experian, SCPC Boa Vista and SPC Brazil helping in obtaining commercial credit and financing with the best bank rates for your company.
With a historically well-established score and credit score; banks, financial creditors, cooperatives, suppliers, retailers and other companies can assess your company’s creditworthiness rather than relying solely on your personal credit.
Here are the top four differences between small business credit and personal credit:
1. Credit checks (see CNPJ)
When you apply for personal financing or for your company, you need to provide your National Corporate Taxpayer’s ID ( CNPJ ) or Individual Taxpayer’s ID (CPF) number for the loan application. This is the information that lenders use to trigger an analysis and consultation with the consumer credit bureaus to check your credit report.
In commercial credit, your company must provide the CNPJ in credit applications so that banks, suppliers and creditors generally verify their credit reports to find out if your company is eligible and unrestricted in the market place.
2. Credit Identity
As an individual, you have the ability to establish only one credit identity tied to your CPF number.
As a business, you have the unique ability to create a business credit identity for every business you own (CNPJs). Once each CNPJ receives its own identification number, it can also establish its own report, historical and commercial credit score.
3. Credit capacity
Your personal credit limit is based on your ability to pay off your financial obligations, such as credit cards, student loans, car loans, real estate mortgages, etc. Their personal credit capacity is affected by many variables, including, but not limited to, the debt / income ratio, new credit, payment history, credit limits, and bureau consultation.
With small business credit, a company’s creditworthiness is based on factors such as company revenues, business years, tangible and intangible assets, credit card transactions, payment history, credit ratings, credit limits , inquiries and many other factors.
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4. Credit Ratings
The most popular credit scoring system used for credit are scores from Serasa and SPC. However, with commercial credit there is no single uniform risk assessment model used by banks, suppliers, financial institutions and retailers.
As you can see, there are big differences between commercial credit and personal credit. As a business owner, it is vital to invest the time in building credit for your micro, small or medium business.
Ultimately, a report and strong commercial credit score will allow a business to acquire commercial credit and equity financing based on its own credit capacity with favorable terms and terms.