Cleaning Up Your Company's Bad Credit Profile

How bad is your company’s credit? You may not think about it much, but you can bet your suppliers do. A bad credit rating can damage your company in several ways:

Loss of eligibility for commercial credit. Bank loans are out of the question if you run afoul of your responsibilities.

Having to pay cash for everything. Paying in cash ties up your working capital and affects your cash flow. You’ll lose access to the 30-day, 60-day, and even 90-day "loans" that trade-credit customers enjoy.

Loss of "early payment" discounts. Many suppliers offer customers significant discounts to encourage payment before the official due date on their bills. If you’re a cash customer because of credit problems, you’re unlikely to get this discount.

To read the full story, click here.

Before it's here, it's on the Bloomberg Terminal.