START-UP BUSINESS CREDIT WOES

I read in the paper that consumer credit continues to increase due to the easy lending profiles being used by the credit card companies. The ease of obtaining business credit, on the micro level, varies more by the specific industry bad debt experience and a company tolerence level.

Dun & Bradstreet has always listed experience in an industry as one of the most important factors of business success. Many times bad credit policy is hidden if the profit margins are good. Only when a big loss hits a small company does the formal credit review of customers becomes an problem. Many of the smaller business never survive the loss.

So... what are the key elements of good business credit? The long held "Three C's of Credit" are Character, Capacity and Capital.

I will explore each of the three areas in detail in future blogs