Financial Habits That Will Help You Avail Higher Credit
The unexpected COVID-19 pandemic had hit the world economy hard. Even in the middle of 2021, many businesses are struggling to recover from the losses. According to a study by Business Insider, 39 million have lost their jobs in the pandemic, and millions of businesses have shut down. As a result, business leaders worldwide are striving to manage finance for business. The pandemic has made the importance of good financial habits all too clear.
Whatever were your financial habits before the pandemic, it’s not too late to start fresh. With good financial practices, businesses can become more resilient during future downturns. In addition, good financial habits can help you build a positive credit profile. Here are a few key credit habits you should keep in mind when building and maintaining positive finance for business.
Financial Habits to Build a Positive Credit Profile
#1: Track All Expenses
Keeping an eye on the income to expense ratio, how much you earn, and how much you spend weekly or monthly can help you track your expenditure, understand what is avoidable or not, and manage your expenses better. Your EMI repayments and loans are unavoidable expenses. But, it is better to have a list of the expenses that you have to prepare accordingly. It’s completely your choice on how you maintain a check of these expenses. You can choose to maintain a diary, meticulous excel files and programs, or opt for a personal finance tool to help you track your expenses better.
#2: Maintain an Efficient Cash Flow
Cash flow is like the lifeblood of a business. Your payments and receivables should both be on time. If you want your business to run smoothly, you must ensure that you are getting your receivables on time and the payments you have to make are happening on time. If you can not maintain the balance between the incoming and outgoing funds, it can negatively impact your business. It is better to check your clients’ credit history before you enter into any agreement with them. Receiving funds on time will help you pay off the payables on time which is another important aspect of a better cash flow.
#3: Disciplined Payments
If your business or you personally owe any loan, you have to be disciplined regarding all the payments. Your personal and business credit rating is an important thing that a lender considers while lending you a loan, whether it be a business loan or a personal loan. Payments made by you towards any of your loans or clients lead to a good CIBIL score and have a big impact as it reflects your business stability and growth.
There are only a few ways to maintain and improve your credit rating, among which making timely payments is the most important one. As long as you are paying your outstanding debt on time, you will retain a good credit score. This is more important as it increases your creditworthiness for a business loan. So, plan the finance for business in a better way.
#4: Find the Best Financial Option for Your Business
Most people are only aware of business loans, but different funding options can help you grow your business apart from a business loan. Oxyzo is one of them. With unsecured business credit of up to two crores, Oxyzo helps businesses in managing their working capital requirements. And, taking credit is easier compared to bank loans. Besides, banks ask for business collateral during the loan application process, but Oxyzo offers collateral-free business credit easily. By collaborating with Oxyzo, you can easily manage your working capital requirements. The flexible repayment option will help you plan EMIs on time and maintain a good credit score. Therefore, plan the finance for business in a better way.