Obtaining finance for your business is often a very simple process, but in some cases, it can prove to be more difficult than you may have anticipated.
One criterion that almost every lender demands is a clean credit file, i.e. no items such as defaults or court judgements, whether the applicant is a company, sole trader or partnership. Such items are known as adverse listings and impact negatively on your Credit Score and your ability to get a loan.
Many finance companies now offer a streamlined application process for businesses wishing to purchase motor vehicles and some capital equipment up to $150,000. They offer excellent rates and a quick, no fuss approval so long as your business has:
- A clear Veda file (Credit agency)
- Established more than two years
- Have an ABN and held GST registration for more than two years
- Are property owners/buyers
Age restrictions on the asset being purchased may apply.
When an application is lodged a credit file check is done. What is on your credit file may make or break the deal.
So what do businesses need to do? Simple: Know what is on your credit report.
We often see a situation where a business is in dispute with a company over the quality of goods or work and the business is refusing to pay the supplier. The supplier is aggrieved at not receiving payment and after a reasonable period has elapsed, lists a default with a credit agency, such as Veda. The first the client knows of this listing is when they apply for finance; which may be after some considerable time has elapsed.
We suggest businesses be pro-active when disputes arise and engage in constant dialogue with the other party so that party is not inclined to list a default on your credit file.
You can for an annual fee, receive advice from the credit agency whenever your credit file is accessed by a third party. We believe every business should do this. We do. Stay in control of your credit file!