Updated: Jan 26

Most small business owners don’t understand the different levels of credit and that each level leads to the next. Much like an infant first learning to crawl, then a toddler taking their first precarious steps into their future, your small business will likely have bruises and skinned knees before it can run after the credit it needs to thrive and then soar off into the great unknown.

Where are you in the race for small business credit?

While everyone would love to start a business today and immediately be able to achieve unsecured bank lines of credit tomorrow, banks and small business lenders are quick to dish out a hard dose of reality in the form of thousands of credit denial letters daily. The fact is, these lenders and creditors have specific criteria each small business owner will have to meet in order to qualify. For some, these are basic prerequisites, such as having a three year old business with an 80 Paydex score. Others may also require risk ratings to be in the low to moderate range. Most will demand a combination of various credit types before they offer approvals.

In reality, each level of credit achieved should help you obtain additional credit at the next level. As each level is established, used, and paid, it reports to your D&B profile and enables you to advance to the next level of credit. By the time you have in business for a while, you will have obtained each of the required elements and can qualify for bank lines and major funding. Unless you are an independently wealthy entrepreneur, you are going to need a solid D&B profile and every level of credit to maintain day to day operations and plan for growth in the future.