Common Questions and Answers

How does the current credit economic condition affect my small business?

Answer :
As banks look at their bottom line from the recent mortgage issues, there has been a ripple effect that reaches to small business owners.

The Federal Reserve surveyed U.S. banks and found that one third of them have recently tightened their lending standards for loans to small businesses. The Fed data shows that many lenders, nervous about their bottom line, have increased their credit standards for small business loans at a rate not seen since September 11, 2001, making it harder and more expensive for small businesses to get loans.

In addition 80% of U.S. banks have tightened loan requirements for commercial real estate purchases as well.

With the banks tightening their credit requirements entrepreneurs need to explore other strategies for finding the capital they need. One of the most important tools for small business owners is business credit, also referred to as trade credit. Trade credit is the single largest source of lending in the entire world. If you aren't using this source of credit you are stifling your ability to grown your company and surpass your competition.

Business credit or trade credit is when one business provides a service or sells a product to another business on credit terms. The business buying the service or product does not need to pay for the transaction up front but rather has terms to pay either monthly with interest or better yet in 30 or 60 days without interest. In fact in most net 30 terms they will provide the opportunity to pay early with a discount.

Written by:
David Gass, President & Founder
Business Credit Services, Inc.

5 Reasons to Monitor Your Business

Business owner

  • 24/7 monitoring of your company's Experian credit score
  • Automatic email alerts of any unusual activity in your company's credit report that might indicate fraud
  • Unlimited access to your company's most up-to-date credit report and score
  • Dark Web Surveillance
  • Business Fraud Resolution Support

Related questions

What steps can I take to build capital for my business, and what type of lending sources should I consider?

What can I do to help make my new business financially stable?

Why is it important to establish a business credit report separate from personal credit?

What steps can I take to establish a business credit report and score?

Do you have more questions regarding Experian business credit reports? Return to the home page of for more commonly asked business credit questions, additional resources, and special offers to help you manage and grow a business.

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