
When it comes to bank credit, consider it the amount of money your business can borrow from banks.
To rate the creditworthiness of a business, banks use their own bank ratings. This is basically the bank’s way of giving your business a grade on how trustworthy it is with money.
To get your business credit moving quickly, you’ll want at least one bank to vouch for you and keep a pretty healthy chunk of change in your account—at least $10,000 on average over the last three months.
What banks are REALLY looking for is whether you can keep that $10,000 average. Hitting this mark gives your business what’s called a Low-5 Bank Rating. This means you’ve got between $5,000 and $30,000 in the bank on any given day.
If your balance dips between $7,000 and $9,999, your rating drops to a High-4, making banks think twice before lending you money. It’s like walking into a bank with a less shiny credit badge.
Here’s a quick rundown of the bank rating scale to see where you stand:
High 5, account balance of $70,000 – 99,999
•High 5: Your account balances are between $70,000 and $99,999.
•Mid 5: You’re rocking a balance of $40,000 to $69,999.
•Low 5: Your daily balance is $10,000 to $39,999.
•High 4: It’s a bit lower here, with $7,000 to $9,999.
•Mid 4: You’re at $4,000 to $6,999.
•Low 4: And the lowest tier, with $1,000 to $3,999.
Keeping your bank account healthy looks good on paper and sets you up for success when borrowing more money from the bank. It’s like showing up to a marathon in shape—you’re just more likely to get to the finish line or, in this case, get the financing you need.
About the Author
Robert Jackson is currently the CEO of Alln4fam Consulting Inc.
At Alln4fam Consulting, he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses.
For more information on business credit scoring, business credit, visit: https://alln4businesscredit.com/