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5 Ways to Establish a Favorable Bank Rating for Your Small Business
by Alex Pardin Financial ConsultantAs small business owners, people have to take a lot of loans and other favors from the bank to sustain their businesses. The business owners should know that in order to keep getting favors from the banks, they need to maintain their bank rating. Business finance and banking are extremely important for the small businesses since these are the major source of investment for them. A good bank rating can help you take your business to the heights. However the most asked question is how to establish these good bank ratings? In this article, we will address this issue and help you in keeping good bank ratings.
Keep good balance rating
The balance rating for your account is the minimum balance that you have to keep in your business bank account for the last three months. So, you have to maintain a Low 5 rating for at least three months or more. This is very important if you are planning to take a loan from the bank. Because with a rating that is not good, your banks will consider you incapable of paying back loans which will affect your business.
Be responsible with the account
Do not have any Non Sufficient Finds checks. These can be really bad for your bank ratings. Make sure you use your account responsibly and only do valid and legal transactions. No bounced checks should be involved with your bank account if you want a good credit score.
Maintain positive cash flow
The cash flow in your account should always be positive and regular. A positive cash flow means that every month a certain amount is left in your account after your company has paid all the bills and the debts. The positive cash flow is a direct indicator that your business is making profits and is growing. This helps the bank in seeing you as a potential loan applicant.
Pay bills on time
Another factor that you need to keep in check is paying your bills on time. Unpaid or late paid bills can have a huge impact on your ratings. The loan repayments should be done on time. Make sure you pay all your bills no later than 30 days of the expiration date. This proves that you are not a defaulter and a responsible account holder who is capable of paying back his or her debts.
Have a good bank history
Your overall bank history is the most important parameter in maintaining your bank ratings. So, make sure that your account shows longevity and stability in all forms. Your relation with the bank should be positive. You can utilize the online bank services of your bank to estimate your bank history and see if you need to work in order to improve it.
These are some major points that any small business owner who is indulging in business banking should always keep in mind. It is also important to note that each bank has some additional criteria that the business owners have to fulfill to maintain their rating. Hence, consult your bank and have much better information about this.
Keep good balance rating
The balance rating for your account is the minimum balance that you have to keep in your business bank account for the last three months. So, you have to maintain a Low 5 rating for at least three months or more. This is very important if you are planning to take a loan from the bank. Because with a rating that is not good, your banks will consider you incapable of paying back loans which will affect your business.
Be responsible with the account
Do not have any Non Sufficient Finds checks. These can be really bad for your bank ratings. Make sure you use your account responsibly and only do valid and legal transactions. No bounced checks should be involved with your bank account if you want a good credit score.
Maintain positive cash flow
The cash flow in your account should always be positive and regular. A positive cash flow means that every month a certain amount is left in your account after your company has paid all the bills and the debts. The positive cash flow is a direct indicator that your business is making profits and is growing. This helps the bank in seeing you as a potential loan applicant.
Pay bills on time
Another factor that you need to keep in check is paying your bills on time. Unpaid or late paid bills can have a huge impact on your ratings. The loan repayments should be done on time. Make sure you pay all your bills no later than 30 days of the expiration date. This proves that you are not a defaulter and a responsible account holder who is capable of paying back his or her debts.
Have a good bank history
Your overall bank history is the most important parameter in maintaining your bank ratings. So, make sure that your account shows longevity and stability in all forms. Your relation with the bank should be positive. You can utilize the online bank services of your bank to estimate your bank history and see if you need to work in order to improve it.
These are some major points that any small business owner who is indulging in business banking should always keep in mind. It is also important to note that each bank has some additional criteria that the business owners have to fulfill to maintain their rating. Hence, consult your bank and have much better information about this.
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About Alex Pardin 
Financial Consultant
5 connections, 0 recommendations, 29 honor points.Joined APSense since, June 12th, 2018, From Kuala Lumpur, Malaysia.
Created on Aug 17th 2018 05:39. Viewed 908 times.
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