For the past two years I've been working with a Credit Union in upstate New York called The Shop Fund. This organization works closely with small businesses in the hopes of helping them get a better credit rating and to improve their credit standing. Through my consulting work with Shop Fund, many organizations are realizing that having a well-maintained and stable credit rating can be a major key to being able to obtain funding in the future. After almost two years, I believe that The Shop Fund has helped a great deal of organizations realize the benefits of maintaining a good credit score.
One of the most important goals of The Shop Fund was to improve the credit rating of the small businesses in its association. After almost two years, there have been a great deal of progress made towards this goal. During my time as a consultant for The Shop Fund, I've seen a steady improvement in the percentage of small businesses that are being accepted for funding. Even though acceptance rates are still not where they need to be, it's a good indicator that the organization is truly seeing what the Shop Fund is doing to help out small businesses.
As a result of the increased level of acceptance of small businesses into The Shop Fund, many credit card companies are now offering better deals and more attractive terms to those with better credit ratings. This makes perfect sense because by improving your credit rating you're showing the organizations that are considering you for credit that you are a reliable borrower. If you're looking for financing and you have poor credit, you're likely going to have a very difficult time finding a loan. However, if you show the potential creditors that you are responsible with your payments and that you have a good credit history, it's a good bet that you'll be given a loan that's more than affordable.
By using your credit card for more than just groceries, you can increase your borrowing power and access more financial resources. Because of this, your credit card can also become an asset for your organization. As you maintain good payments on your credit cards, The Shop Fund will provide you with additional funding that you can use for any number of reasons including upgrading equipment, opening new stores, or increasing order size. Just make sure you pay off your balance every month.
While this may seem like a good thing to do, there are some drawbacks you should be aware of. One of these is that you can't obtain credit based on your previous credit rating. If you have poor credit history, you may find it difficult to find a suitable credit card to apply for. Even if you can get approved, the interest rate might be much higher than what you would pay if you had excellent credit.
The Shop Fund doesn't directly provide funding to a business. In order to qualify for a loan from The Shop Fund, you must be a non-profit organization with a solid business plan that will enable the organization to meet its financial obligations in a timely manner. When you apply for a loan using The Shop Fund, you must also provide financial information about your company to the organization. This information will allow The Shop Fund to determine whether your company meets the criteria for receiving a grant. This information will also enable The Shop Fund to determine how much money it will loan to a non-profit organization.