Bad credit doesn’t have to hinder the success of your business
Are you worried that due to bad credit, you won’t be able to become a successful business leader?
Originally reported by our sister brand, Business Review Canada, If you’re currently suffering from a bad credit score, then you may be worried that you’ll never be able to start and run your own company.
RELATED TOPIC: A guide to establishing and maintaining good business credit
Even though you may face some challenges along the way (i.e. getting the proper funding to initially start your business), bad credit doesn’t have to hinder your dreams of starting your own company.
So just what can you do if you need funding for your business, but don't have good credit?
Look beyond banks
As the article, "Just Exactly What Is Bad Credit?" points out your credit score is used to assess how much of a risk you are to loan money to.
If you're showing unpaid debts or skipped payments, that won't inspire confidence in a big lender such as a bank.
But it’s interesting (and vital) to know that banks are not your only choice when it comes to borrowing large amounts of money.
Online lenders have risen in popularity in recent years, and can be a viable alternative if you don't have the best credit score. Online lenders are more willing to take risks.
Do be aware that online lenders often charge higher interest rates than banks, and are not as strictly regulated. That's why you should always read the fine print in detail, and look to reviews, ratings and personal recommendations when making a choice.
Micro lending is also an option for those with poor credit.
Micro lenders such as ACCION, Grameen Bank and Kiva provide small loans (typically around $1,000- $5,000, though amounts may vary). Micro lenders look beyond your credit score, taking into account your passion, experience, and the viability of your idea.
Consider crowd funding or peer to peer lending
Crows funding is also an option that you may want to consider pursuing.
Crowd funding sites allow you to raise money by letting people know how brilliant your idea is and getting them excited about it. The more effectively you can market your idea, and your crowd funding page, the more likely you are to succeed.
Peer-to-peer lending removes the financial institution; allowing investors to lend directly to businesses.
Whether you are a candidate for peer to peer lending will depend on just how bad your credit score is, as it may still be taken into account. However, with typically lower rates and more flexibility than blanks, peer to peer lending is worth investigating.
Lending isn't the only way to finance a business.
You can also look into the possibility of grants. Be wary of websites that promise to find you Government funding - getting a grant is by no means an easy route, so be wary of any company that makes it sound simple.
Be prepared to do a lot of research into what is available both for your type of business and in your geographical area.
Grants are strictly administered, but depending on where you live you might find grants available for healthcare companies, technology (especially green technology), tourism businesses, or retail in poor areas.
Clean up your credit score
If you want to help your business financially in the future, do all you can now to clean up your credit score:
- Pay off those credit card balances if you can;
- Be mindful of the ratio of what you put on your credit card compared to what you pay off monthly;
- Try to consolidate credit card usage into one or two go-to cards rather than using lots of cards;
- Pay bills and balances on time;
- Make sure you see a copy of your credit report and query any charge or debts you feel are unfair.
Getting capital for your business can be challenging when you have credit problems, but bad credit doesn't have to spell disaster.
When it comes to getting money, you have to be creative and flexible. However, make sure to always read the fine print of a contract and to never take more money that what you will be able to later pay back.
About the Author: Tristan Anwyn is an author who writes on a range of topics including social media, SEO that works, and how to find funding for your business.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.