Tag: credit

Doing business today can be quite tough due to reasons ranging from lack of customers to competition from other business that deals with similar products or services as you. Small and large businesses are all on the look out to try as much as they can to increase sales and maximize profits. Giving out credit to customers is an ideal way to increase sales as well as create a good relation between you and the customer. Businesses that offer credit services to their customers have recorded increase in sales of up to 50 percent. This means that the customer can take goods and pay on a later date as agreed.

Factors to consider

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Before giving out credit to you customers, you should be able to know the amount of risk your business is willing to take and handle when issuing out credit your customers. Ensure that your business is stable enough to take up such a transaction; this is because most credit offered to customers usually end up being unpaid resulting to losses or even closer to businesses.

Credit terms

Make an agreement with you customer about the amount you are willing to spend, and the duration it is going to take for it to be paid back. Gauge the amount you are willing to give out and ensure it won’t stall the normal flow of business until you get paid. Credit can take between 5 days to several months as agreed upon by both parties.

Credit qualification

Before extending credit to customers, it is essential that you determine their creditworthiness. This is important because it increases the chances of you getting back the money that you have issued out as a credit to the customers as credit. Start by running a background check on them. Request for simple things like credit application references or run a check with consumer credit agency to pull out important information concerning your customers.

Credit policy

trsefegrfgvCreate a credit policy that pulls all the process of applying, issuing, submission and collection of all credit related activities so as to be able to plan ahead. This will save you time, and other hustles as everything will be clearly drafted. This can be done by a hired skilled personnel or use the available staff you already have from an accountant to bookkeepers to help with all the processes.

Credit review

Keep a track record of customers and the amount you offer them regarding credit and review them later. This will guide you when intending to increase the amount of credit, which you are willing to give out to your customers, as well as monitoring customers that pay up on time to increase their level of credit upon their request.

Credit

Unsecured loans refer to loans that are issued to borrowers without collateral or security and only relies on the creditworthiness of the borrower. These are loans that are obtained at a higher risk to the loaner as there is no property to cover the loss if you default and you are unable to pay back. It is also referred to as a personal or signature loan. Unsecured loans have in the recent past, been issued quite a lot. This is as a result of the increasing demand for quick short-term money and its easiness to access. However, for you to qualify for these loans, you must have high credit ratings.

Advantages that come with unsecured loans

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Unsecured loans are easy to access. This is because you will not need anything to give you equity. It means that you already qualify for this loan even if you do not have any property under your names like a car, house, boat or land. This is good because you will not lose anything if you default, or you are unable to pay unlike other types of loans that banks come and recover personal properties as collateral.

Easy to receive

Unlike other loans, unsecured loans are easy to obtain. Approval is always immediate compared to other types of loans, where you have to provide the personal property such as legit title deed for land and log book for a car to access them. With the unsecured loan, you can apply and receive your loan approval in a matter of hours. This makes it ideal in case of financial emergencies.

Minimal documentation

sdcghrxdcfhgbhUnsecured loans are flexible loans that do not require a lot of paperwork for you to receive them. This is good because it will cut on time and you will be able to get your loan faster compared to other types of loans that require lots of paperwork and senior personnel to approve. All you need to check is ensure that your credit ratings are good.

Additional flexibility

Since unsecured loans are provided based on the borrower’s monthly income, getting that extra cash can be used to expand or start a business. Unsecured loans are flexible because modes of payment can be changed and agreed upon between the lender and the borrower in case of an emerging issue.

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