First, What Is A Business Credit Check?
A business credit check or credit report is very similar to that of a personal credit check. Most businesses need credit to grow and survive. Just like individuals, businesses and corporations need to be graded on a scale to assess their credit worthiness (like a FICO score). In most cases, businesses will be asking for huge sums of money, much more than in personal lending situations.
A creditor or grantor will have a business credit check done on a loan or line of credit application. The loan or credit request will be accompanied with a staggering amount of reports, financial statements and usually a business plan. The business credit check is run to check on the payment history of other past loans and credit. Many of these items are not usually found in a financial statement. The statement might say that a payment was made, but it probably doesn’t include a note as to whether it was paid on time or not.
Where Can I Get A Business Credit Check?
There are many companies who will assist a potential lender by delivering a quality business credit check. Probably the largest and most famous company would be Dunn and Bradstreet.
The are a large variety of credit reports that can be assembled and accessed. The detail and breadth of the report will be directly proportional to the amount of money being requested.
A relatively new company probably doesn’t have a lot of credit and loan repayment history. An established corporation could have decades of repayments, loans and debts.
The ability to run a credit check on businesses is also very important for other small businesses. If you own a fairly small business and are thinking of extending credit to another corporation it would be foolish not to investigate their payment history and credit worthiness. And now you have the option of running an online credit check on most corporations you’ll do business with.
In today’s society many small businesses have closed because of a huge accounts receivable account that was unpaid from one client. Sometimes unforseen circumstances cause good businesses to get into trouble. But, not requesting a business credit check on a potential client you are going to extend credit to would be reckless.