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A credit application helps prevent delinquent payments, bad debt and financial loss. An accurate and up-to-date credit application is one of the best ways to minimize risk. The application also allows the company to better implement their credit policy.
A credit application fulfils two main purposes: It provides the lender with enough details to determine the borrowers likeliness to repay the loan. It provides the borrower with details to determine the cost of credit, such as interest rates and fees.
Having access to business credit is the lifeline for a business. It enables you to obtain the capital you need to expand, cover day to day expenses, purchase inventory, hire additional staff and allows you to conserve the cash on hand to cover your cost of doing business.
The information provided by the individual or business is then utilized to establish the borrowers credit history, job status, and ability to repay the loan. The credit application form may also be used to offer credit to customers, allowing them to buy items on credit and repay them when they sell them.
Business credit is available in many forms, including credit cards, loans and lines of credit to cover routine expenses or fund growth initiatives. Lines of credit are typically used to cover operational expenses, not to purchase assets.
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Why is your business credit profile important? The ability to borrow money at the right time can help you jump on opportunities and navigate challenges. You can use credit to add to your working capital, lease equipment or vehicles, or acquire another business.

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