Credit Based Small Business Financing vs. Non Credit Based Small Business Financing

In this section we will outline the pros and cons to both credit based small business financing and non-credit based small business financing. 

1. Credit-Based Small Business Financing 

When it comes to credit based small business financing the benefits are evident.  You have an opportunity to compound on your already flourishing small business credit.  There is a very good chance you will be able to take advantage of great interest rates as long as your established business credit is favorable.  On the other hand, if your business credit is not favorable, you may end up paying outrageous interest rates and hurt your buisness credit further by not being able to keep up with the payments.

2. Non Credit-Based Small Business Financing

Non-Credit based small business financing comes in many different forms.  This is an excellent way to begin building your business credit with vendors.  Many vendors will extend credit without a credit check if you have your tax id number.  In turn when you make your payments to these particular vendors they report favorably to the credit bureaus and you are on your way to building strong business credit.  This can be true for the reverse situation as well.  If you are unable to make your payments on time these vendors may report late or slow payments to the credit bureaus and damage your small business credit before you ever get it off the ground.

Please contact us for more information about credit-based small business financing, non credit-based small business financing and small business credit.