Running a roofing business not only involves selling and hardcore manual labor, but the business owner also needs to provide his workers with the right supplies and equipment to get each job done on time. And pocket change or one job’s profit won’t always suffice.
From work trucks to equipment that allows your crew to work smarter (not harder) like the Equipter RB4000, financing is inevitable. And the higher your business credit score, the lower your interest rates.
Whether you’re starting a roofing company or looking to grow your existing roofing business, it is possible to overcome a bad credit score to land more reasonable interest rates.
What Influences Your Business Credit Score?
Many factors come into play when calculating someone’s personal credit score, but when measuring a business credit score, reporting bureaus hone in on the following three factors.
1. Payment History
If you’ve been in business for a while, you’ve probably had to finance equipment or at least manage a business credit card. Just like with personal credit, late payments negatively affect your business or commercial credit score.
Your company’s relationships and repayment histories with suppliers and other lenders are also taken into account when calculating business credit. Be sure that you’re always making regular payments in order to maintain a good score and avoid being directed to collections.
Note: Lenders often view your personal credit score in addition to your business credit score as a way to determine your reliability.
2. Legal Filing History
Tax liens, bankruptcy claims, and other ugly legal filings will damage your credit score and likely lead to higher interest rates when you’re ready to take out a loan. Maintaining a healthy, smooth-running business can help you avoid filing for bankruptcy and keep your business credit intact.
3. Business Specs
Business specifics are also largely considered when calculating your commercial credit score. This can include how long you’ve been in business, the number of employees at the business, and even the type of business you run. The longer you’ve been maintaining healthy business relationships, the better your commercial credit score is likely to be.
Interpreting the Numbers
Unlike personal credit scoring (300-850), business credit scales vary (0-100; 0-300). To further understand business credit scoring, note that there are three separate reporting bureaus that calculate different aspects of business credit scores. Different vendors and lenders often focus on scores provided by specific reporting bureaus, a topic Gerri Detweiler from Nav explores in his article, “Business Credit Scores & Reports.”
When reviewing an application for the Equipter RB4000, we focus on two factors: 1) how long a company has been in business, and 2) the applicant’s credit score. If the company has been in business two years or longer and the applicant has a credit score above 700, the applicant is likely to qualify for Tier 1 interest rates—the best of the best. We also work with various financial institutions to help those with lower credit scores find the most reasonable interest rates for their budgets.
Keep a close watch on our blog for more information on how to grow your roofing business and maintain healthy customer relationships.
The information provided by Equipter is not to be taken for legal advice. Consult your financial institution or advisor for assistance in assessing your business credit score.