You could be thinking of starting a trucking business, or already have one going strong. Truck finance is an inevitable part of a trucking business that helps business running smoothly. What happens when you have a bad credit score that prevents you from reaching your business goals?
There are other ways to finance your business such as a truck finance that can help you swerve out of your bad credit woes of not getting a loan.
The Australian economy is supported largely by small businesses which make up almost 97% of the economy. Truck Dealers in Australia released a report showing that the trucking industry is worth the investment with an annual growth of 2.7%, generating a revenue of $4 billion from 2012 to 2017. It comes as no surprise why you would want a slice of the cake too.
However, bad credit can put potholes on your route to securing a loan
Bad credit can prevent you from getting any future loans or credit from financial providers. If you have defaulted on any of your payments by; failing to pay your bills on time, applying too often for credit, or being overdue on payments can count against you on your credit file. Australian businesses are currently running debt at about $918,658,677 according to the Australian Bureau of Statistics. This can cause you to be part of the 60% small businesses that shut down within the first three years of starting. 40% of these businesses closed due to inadequate cash flow or high cash use.
What listings are bad for your credit file?
You might be wondering what is the criteria lenders use to determine whether you are up to scratch to receive a loan. It is advisable that you always check your credit report constantly to see if all is up to date, and that there are no mistakes. You can order a copy of your credit file at Australia’s credit reporting agencies such as Equifax, Dun & Bradstreet or Experian.
Some of the few listings that can count against your credit file are:
- Defaults in payment
- Bankruptcy if you are unable to pay your debts. This listing can remain on your file for the next 5 years.
- Being summoned to court due to debt will also be listed on your file.
When it comes to securing a loan for your business, your credit file can either speak in high favour for you to lenders who will view you a trustworthy person or a risk. Either decision can have a great impact on where you will be taking your truck business.
There are still alternative ways to open doors for your business
Bad credit can limit your access to certain doors, but it doesn’t shut all. There are loans that can help you purchase your new set of wheels that can be an addition to your business to move it forward. Personal loans can be an alternative resort, or even a short-term loan if you urgently need the money. It’s advisable to speak with a reputable financial creditor that will be able to further assist you. Opting for a debit card can help you spend wisely and decreases your chances of running multiple credit card debts that will keep you in the red for long.
Try to improve your credit score over time by doing things that will benefit your funds and business in the long run. By paying your bills on time, limit the number of times you apply for credit cards or loans, and having a consistently low balance on your credit card can be one of the many things you could do to give you a good credit rating.