When you own your own business, at some point you’ll find yourself operating either with less working capital than you need or at an absolute short-fall that puts you squarely in the red. In either of those instances, you’ll have to figure out your course of action to either save your business or shut it down. Let’s assume you want to save your business. In that case, you should prepare ahead of time so you have a plan in place if things get a little rough.

Kinds of Credit

Business credit and personal credit aren’t exactly the same thing. Lines of credit are similar in both your personal and business lives. You still get a fixed amount from a lending institution and then have the ability to pay it back all at once or over time. You can usually pay some back and then re-borrow from lines of credit. For your business, you can look into either secured or unsecured lines of credit. Secured means you’re providing collateral in the event of default; unsecured means you’re not.

You can also obtain a business credit card. Those are easier to get if your company isn’t already operating at a deficit. Taking out a traditional loan, applying for grants, soliciting the interest of an angel investor or venture capitalist and crowdfunding work to generate needed funds, also. Just beware of the ramifications of each type of lender or investor. You don’t want unwelcome surprises.

Demonstrating Trustworthiness

One way to ensure you can get the money you need when you need it is to build your business credit. Your business has a credit score much the way you do personally. You should know what your score is and actively work to improve it as much as possible.

One way on which most financial advice experts agree to build your business credit is for you to get a business credit card. Using it and paying it off as soon as possible will raise your score. It also comes in handy for emergencies or for purchasing big ticket items.

Some vendors and suppliers report your payments to the business credit bureaus. Find out if yours do. If so, pay their invoices as soon as possible and pay as much as you can on each invoice. Their positive reports will boost your business credit score.

Whether you’re actively looking into lines of credit or simply planning for contingencies, knowing your business credit options is wise.