August 7, 2021 5 minutes readEntrepreneur contributors do not necessarily agree with the opinions expressed.The world of finance is changing fast. The competition is intensifying and there are more opportunities. This is exactly what helps new businesses to look towards the horizon for their new boundary.Access to capital, innovation, and better management of your finances are the key stepping stones to success as a startup owner. Did you know that these opportunities are right in front of your door? This is where business credit comes into play.After spending a lot of time improving your credit score, now it's time for you to use that magic number to increase your chances of making more money for your startup. Startups are using business credit in a variety of ways to grow quickly and make more. This flowing stream of income is so tempting that it would be insane not to try.Companies with higher credit scores don't just rest on their accomplishments. They are transforming their hard work into financial opportunities that will help them achieve their financial goals.Related: How Startups can leverage Corporate Venture Capital Opportunities in MENA1. Reconsidering insurance premiumsAt the start of a startup's journey, it will likely purchase insurance policies. A startup can save significant money by getting a lower premium once it has built a good credit score.This is because insurance scores are calculated using credit scores. Small businesses often purchase insurances despite having lower credit ratings. They can negotiate a lower premium with their insurance companies if their credit scores rise.2. 2. Refinance the auto loan or commercial auto insuranceMany startups use auto insurance to insure their vehicles. Your credit score will tell you if they will pay your insurance premiums on time or not.Insurance companies will increase commercial auto insurance rates if they miss their payments or default on debts depending upon the credit score of the business.Similar to the above, startups that have higher business credit can visit their insurance agents and ask for lower premiums. This will help them save money.Commercial auto loans are the same. A startup can save more money and scale faster if they have a high credit score.Related: 15 Strategies to Quickly Expand Your Business3. Credit cards and loans: Lower interest ratesCredit scores are also used to obtain business loans. Startups with low credit scores or declining credit may be eligible for a loan at a higher interest rate, or denied the loan entirely.Startups with higher business credit can use it to obtain business loans at lower rates. They will need to go out on the market and find a lender offering a low rate.This is because everyone wants to be a good borrower. Startups with better credit scores are more attractive to loan companies.Similar to the previous example, a startup like this can earn little or even zero percent interest. These opportunities can help you save money and increase your capital.4. 4.Many startups don't understand the concept of balance transfer credit cards. Startups who find it difficult to pay off debts due to rising interest rates will be able to take out a balance transfer credit card.For balance transfers from other cards, a balance transfer credit card can offer a very low interest rate or even zero percent for an initial period. Where does business credit play?It is here. If a startup's credit rating is high, it will be required to pay lower interest rates than banks. Startups with poor credit will need to repay more.5. 5.This is the best part. The best business credit cards offer the most knowledge.A startup with a high credit score can select the best type of business credit card for them. You can get up to 5% cashback on certain purchases It can also earn loyalty points, which allow it to redeem more points for travel, tours, and stays at certain hotels.What about a business trip abroad for free? Seems exciting, right?ConclusionHigh credit scores are like having VIP access to the best deals. It's like a home run for startups. A better credit score can lead to more peace of mind, easier expansion and management of finances for a startup.Save more, invest more and scale up quickly.Business credits are a great way to bridge cash flow gaps for established startups. However, new businesses often struggle to obtain capital in other forms due the poor credit rating.It's possible that you won't see a lot of benefits for your startup at first. It's still a great way to increase your business's financial stability over the long-term.Related: How startups can use AI-Powered Tools for Scaling Up
