What Are Revolving and Non-revolving Credit Lines?

There are two types of credit lines (also known as lines of credit) – revolving or non-revolving. The differences between both lie around what happens after the maturity of the credit line. A revolving credit line will allow the borrower to drawdown immediately subjected to fulfilling certain mutually agreed terms while a non-revolving credit line will terminate the entire facility.

How a Revolving Credit Line May Affect You

Each arrangement brings about its own advantages and disadvantages. Usually, a borrower with strong financials and an existing relationship with the lender is more likely to obtain a revolving credit line. Revolving credit lines provides convenience to the borrower. This may come at an extra cost to the borrower in the form of a facility fee (think retainer).

Revolving credit lines are suitable for borrowers that operate in sectors that work on projects with long cycles. Therefore, they are more suitable for borrowers that have business deals with consistent terms. Let’s take a company that supplies basic medical supplies to a hospital as an example. An ideal and common scenario would be a blanket commitment for the bulk of these medical supplies, to be delivered in smaller batches over a period. Due to cash flow predictability, lenders are more inclined to offer a revolving credit line to the borrower to finance their contract requirements. The borrower benefits from the assurance that a facility is readily available. The speed of drawing down from a revolving credit line is faster too.

How a Non-revolving Credit Line May Affect You

For borrowers that operate with bespoke terms in every business dealing, a revolving credit line would not work. Having a revolving credit line may create inflexibility and incur additional costs to these borrowers’ operations. An example would be a company that supplies building materials to a construction project. The delivery and credit terms will vary at each stage of the project schedule. As these terms differ, having a revolving facility that has pre-determined drawdown conditions may hinder the borrower’s operational performance. This may potentially create a negative cash flow cycle due to a mismatch in credit terms and repayment schedules.

A revolving facility would sometimes, require the borrower to put up asset(s) as collateral or security. This is a result of the long tenure of the facility. This means the borrower’s asset(s) is going to be tied up for a long period of time. Imagine having to do this for a revolving facility if you do not utilize it frequently.

Conclusion

In conclusion, every borrower must evaluate their requirements and consider all options before coming to a decision. Often what may seem to be very attractive and helpful could be causing inefficiencies , leading to additional cost which could add up in the long run.

For more information, do reach out to us at support@lytefinance.com for a chat!

Short-term SME loans have maturity of one year or less, making it a short-term commitment for businesses. The availability of short-term debt financing allows SMEs to obtain faster approval compared to traditional lending where the process can be long with tedious documentation, delaying the required funds.

To operate smoothly, SMEs often require short-term startup loans from debt providers instead of long-term debt financing. Loans with tenure ranging from 3 months to 12 months provides SMEs the flexibility to get in and out of financing quickly without tying up their credit limit. Short-term business loans are also potentially more cost-effective despite having a higher interest rate due to the shorter repayment schedule where less interest is incurred by the business.

A survey by Electronic Transactions Association claims that more than half of business owners would choose a loan with shorter tenure to minimize total fees and expenses when facing a short-term ROI opportunity. Besides, short-term SME loans can act as a cushion when your business experience fluctuations in revenue or when an emergency occurs. This prevents startups from facing financial distress, especially when COVID-19 disrupted the operations of many businesses.

Short-term loans can be utilized in many ways, with the following being the common reasons startups seek for short-term debt funding:

1. To Raise Working Capital

Working capital is the heart of a business. It ensures the business can function day-to-day. A short-term SME loan covers temporary deficiencies in funds. This includes expenses such as payroll, marketing fees and payments on short-term debt. To fuel business growth, investment in expenses that drive growth such as advertising and marketing are essential. Loans can help cover expenses and provide a buffer, allowing the business to serve customers without compensating for growth.  

2. To Bridge a Financing Gap

Bridge loans are short-term loans provided to startups until they secure a permanent financing. The process of equity fundraising via venture capital and high net-worth individuals, or angel investors is often long and complicated. This often leads to delay and affects the cash flow of startups in need of capital injection. With a short-term bridge loan, the startup can continue its daily operations and meet its short-term obligations while waiting to receive money raised from equity financing.

3. To Pay for Inventory

Some businesses require large amount of funds upfront to pay its suppliers to produce goods, but end customers usually have lengthy payment terms for the product. Businesses often face cash flow problems when they must raise substantial funds within the company to procure the product for sale. Payment terms can range from 30 days to 120 days, making the need for a purchase order financing from debt providers. These loans are usually provided to businesses by a single disbursement followed by a bullet repayment upon the maturity date when the business receives money from customers, making it a quick and hassle-free process.

4. To Improve Terms on a Larger Loan

Credit history plays a crucial role in a lender’s decision-making process when SMEs seek for financing. Lenders are more comfortable to provide financing to startups with good repayment history. Good credit conduct increases their confidence in the startup’s ability to repay. Businesses without credit history also tend to obtain loans with less ideal terms. Often, they secure loans with high interest rates and processing fees that will affect the company’s profitability. When startups establish a good relationship with lenders and repay their loans promptly, better terms are offered by their lender. This is especially useful when they require loans with larger quantum in the future.

Concluding Remarks

Usually, short-term loans have zero collateral if your business has a great credit score. It is also coupled with speedy approvals and flexible repayment terms based on the needs of your business. You can also read up on how to increase your chances of obtaining a loan here.

Interested to have a chat with us on the opportunities available? Kindly reach out to us at support@lytefinance.com or contact us for a chat!

In August 2021, we participated in a panel discussion alongside Giulianna Crivello, Head of Ventures at Draper Startup House, and Mahesh Niruttan, Chief Executive Officer of 20Cube Logistics. During the session, we touched on how companies can find a balance when raising debt and or equity, and how the space will evolve in the future. In this post, I would also like to touch on in greater detail how credit is evaluated by lenders.  

Consider this scenario, your friend has reached out to you asking to borrow $100,000 over 12 months. How would you evaluate this request, and what would be your response to her? 

In the next section, we will identify the potential questions we can ask during credit evaluation.

Purpose of funds:

What will the funds be used for? ( Always seek for borrower to disclose purpose of funds during credit evaluation)

It is important to make known to lenders how the funds are going to be utilized. The last thing lenders would want is for your friends to use the money for inappropriate purchases such as vices. Money should be going toward revenue generating activities. This provides lenders with comfort that the loan can be fully repaid at the end of maturity.

In this instance, the use of funds will go toward starting a Food and Beverage business (F&B) selling pastries. In addition, the funds will be used for hiring of manpower, and rental of the premise.

Source of repayment:

Since the tenor of the working capital loan will stretch for 12 months, how will the borrower pay off the loan monthly? What are the sources of funds?

Ask for financial forecast:

1. What would you expect sales to be for the next 12 months?
2. When do you expect to be profitable?

Consider the following (worst case) scenarios:

1. How will the pandemic affect the business? How does she plan to overcome these obstacles?
2. If the business does not perform as expected, how is she going to continue with the payments?
3. What was her salary before, and does she have enough savings to repay in a worst-case scenario or black swan event?

Existing debt:

What are the company’s current debt obligations? (This significantly impacts the credit evaluation process)

Usually, newly set up companies have little to no debt acquired on their balance sheet. However, if the company has been in operations, you might want to examine their past financial figures. This helps lenders understand the existing debt commitments undertaken by the company in their credit evaluation process.

Existing commitments have a direct impact on the repayment ability. When the amount of monthly dues exceed the companies inflows, the company’s repayment ability will erode.

Concluding Remarks

The above are some factors that lenders take into consideration when making a lending decision. As a result, it is always helpful to have these information prepared beforehand to help funders process your application quickly. This speeds up the application process, allowing you to capture business opportunities that are time sensitive and propel your business to the next level.

We are very grateful to our partner, Fundnel, for hosting this event. You can find out more about how to strike a (financing) balancing act here or drop us an email at support@lytefinance.com. 

Your cash flow is a critical determinant of success. Find out how it can make you sink or swim.

It goes without saying that without a healthy flow of cash your business will struggle, at best. The increasingly competitive nature of all industries necessitates agility and speed, particularly if your business is nascent. Even if your company is mature, without strong cashflow you may not be able to follow through with your existing plans for expansion or make needed changes. Or worse, if there is significant disruption to your business for reasons outside of your control (i.e. a key supplier goes down), your cash flow becomes your life line.

Your Cash Flow Statement

As a venture debt provider, we analyse a company’s financial performance to assess whether they might make a good partner. And while balance sheets and P&Ls are important to our process, the Cash Flow Statement is particularly crucial because we can deduce the company’s cash runway. As a high level guideline, companies with less than a 6 month runway tend to be riskier, making it tougher to raise capital.

The quality of your cash flow can be determined by whether there was an increase from previous years, where the cash is being allocated (i.e. R&D, investments, etc.), and how your net cash flow compares to your net profit. This last point is particularly important and deserves its own discussion.

Savvy Receivables Management

How you collect payment from clients has an enormous impact on your cash flow. Depending on your industry, you might be collecting payment from clients before delivering your service/product, or the other way around. Education typically falls under the former, where tuition for a semester is paid at before classes commence. The same can be said for subscription-based products, like Spotify or Netflix. Companies like these should, in theory, have a positive cash flow and if it is sufficient enough they can run their operations without taking on any externally-sourced capital.

If you have a lot of upfront expenditures, such as purchasing inventory, you risk running out of cash even if your business is profitable. This is where managing your receivables is critical and should be a priority communicated to your entire organization. Here are some top tips you can leverage:

1. Wherever possible, ask customers to pay cash on delivery.
2. Choose credit worthy customers.
3. Set a time cap on credit terms so that your customers aren’t arbitrarily prolonging payment.
4. Leverage government financing schemes (e.g. Temporary Bridging Loan) to plug the cash gap in times of need.
5. Establish a relationship with a trusted debt financing partner to ensure you have access to capital as and when you need it.
6. Manage your payables so that your outflows don’t exceed your inflows.
7. Offer small discounts to customers willing to pay early.
8. Insist on collecting a deposit as a percentage of the sale.

Whatever the nature of your business, keeping close tabs on your cash flow will support your planning efforts and help sidestep problems. For a more involved discussion on boosting your cash flow, give us a shout at support@lytefinance.com.   

Why venture debt, why not banks?

The target market for traditional lenders (banks) are businesses with 3 to 4 years of operational history. Typically, they have metrics that are achievable by profitable businesses.

Some of the deciding factors that traditional lenders look at are:

• Strength of cashflows, chargeable assets and guarantees
• Current ratio – 1.2x and above
• Gearing ratio – 1.2x and below
• DSCR – 1.2x and above

Generally, early stage startups are non-profitable with unfavorable ratios. This is because their focus is on generating top-line growth. For instance, software startups usually have low current assets, typically reflected by low cash in bank. On the flipside, they have high current liabilities, illustrated by long conversion date of convertible notes.

Venture debt takes a flexible and creative approach towards financing startups by looking at other metrics that traditional lenders disregard.

When should I consider venture debt?

Venture debt is ideal for startups that are generating revenue, usually pre-series A and beyond. Typically these startups are raising their growth round to accelerate growth or undergoing expansion. Besides, it is also suitable for startups launching new products, have achieved profitability and/or are looking to fund an acquisition.

Furthermore, venture debts are typically complementary to an equity round. Some utilize a revenue-based financing model whereby the lender obtains a portion of the revenue/profit generated over a pre-defined period. Usually lenders step in to fund the customer acquisition cost or general operational activities.

Generally, there are two scenarios where startups could consider venture debt:

• Firstly, as a bridge round. Startup has burn through their bank and is time to raise a Series B. However, KPIs have not been met to trigger favorable terms that the startup is looking for. Hence, startup decides to raise a small equity bridge round to lengthen runway by a few months. This ensures KPIs are met before moving on to Series B. To prevent dilution, the startup decides to raise a bridge round with a mixture of equity and debt.
• Secondly, as a normal round. Startup is now raising its Series B round and is required to raise a projected amount of capital to create a safe runway towards their next milestone. To avoid massive dilution to the founders, the startup decides to raise a part-equity-part-debt round. This minimizes dilution while achieving a sufficient runway towards their next milestone.

What are some of the things to expect?

Many have raised questions regarding venture debt to me in the last 24 months. Here are some of my key takeaways:

1. Pricing and Structure

• Most venture debt have a monthly repayment commitment with fixed interest and fee are through the loan tenor. Interest and fees vary from startups to startups, subjected to both macro and micro-economic factors.

2. Duration

• Duration of due diligence and contract negotiation depends on the speed both parties are moving at. It is important for startups to prepare the necessary documents accurately and promptly to ensure a smoother process. Besides, startups should plan their cash requirement ahead of time as the negotiation process often drags out longer than expected. Depending on the venture debt firm, disbursement of capital can occur within 2-3 days after the execution of legal agreements. However, there could be a delay of up to 2 weeks to raise capital.

3. Warranties or Equity-kicker

• A warrant is a stock option for the holder of the warrant. In this scenario, the venture debt can purchase equity from the startup under predetermined terms and conditions. For instance, the warrant permits the venture debt the right to purchase x number of stocks at $y for z years, and x is 100, y is 1 and z is 5. The venture debt can exercise the option to purchase 100 stocks at $1 in the next 5 years.

• Equity-kicker is a clause where if certain conditions are met, the venture debt will receive an amount of equity on the startups during loan maturity.

Usually, warranties and equity-kickers require an approval from the board of directors as most startups prohibit these through their company’s resolutions.

For more information on your financing needs, kindly contact us!

Venture Debt vs Venture Capital, which is better?

Are you ready to bring your startup to the next level? Are you thinking of raising from Venture Capitals (VCs) or Venture Debts (VDs)?

We can all agree that money is one of the most significant factors in a SME’s success. In fact, according to an article written by Forbes, one of the most common reasons behind why businesses fail is the lack of capital or funding. Today, SMEs have more financing alternatives than the traditional equity financing from venture capitals.

Equity Financing

Equity financing involves selling a portion of the startup in return for capital. For example, when Firm A wants to raise capital for its operations and expansion overseas, the owner decides to sell its 15% ownership to a group of investors in return for capital. The investor now owns 15% of the company whereas the owner owns 85%. Although the owner has no obligation to repay the investor, there are downsides to this. In future equity financing rounds, the owner would have to give up more of its company and share profits with its investors.

Venture Debt Financing

Venture debt financing can be an alternative or complement to equity financing as it prevents dilution of the owners and its existing investors equity stake. Besides, collateral is not required as startups have yet achieved positive cash flows to obtain conventional loans from traditional financial institutions. Instead, lenders are sometimes compensated with the company’s warrants. 

Venture Debt as a Complement to Equity Financing

Let us take a deeper dive into venture debt as a complement to equity financing.

Typically, startups take on venture debt after an equity raise. This increases the total amount raised without diluting more equity owned by entrepreneurs and investors. Besides, this extends the cash runway of startups which promotes confidence in its stakeholders. With so much uncertainty surrounding us it also acts as a buffer for what can go wrong, for instance, cancelled contracts and projects from clients.

However, many early-stage startups rarely consider debt financing as a funding source because of the following misconceptions:

• Debt funding for startups is too expensive
• Debt funding from venture debt lenders should be last resort
• Early-stage startups are unable to obtain startup loans due to poor cash flow and poor business credit score
• Debt funding for startups is bad for profit

Some also think venture debt is synonymous with convertible debt/ convertible notes. The latter can be converted into equity, but such rights are not attached to a venture debt. This is optimum for founders that want to avoid painful dilution. Debt has been hard wired in us as a ‘bad thing’ but think about the possibilities you can unravel. A short-term debt facility could allow you to fuel your startup’s growth with little equity dilution; or increase your cash runway to achieve the next milestone.

Whether you want to take on venture debt or venture capital, there are many flexible options out there. Here at Lyte Finance, we provide customizable debt structures for your startup. Speak to us by reaching out at support@lytefinance.com

Are you thinking of scaling up your business with a business loan?

Do you require a working capital loan to purchase more inventory?

Would you like to expand your marketing strategy to improve sales?

These are main reasons why business owners take up working capital loans from traditional banks, peers and families, P2P platforms, government institutions etc. Be sure to talk to multiple financiers/ debt providers to compare the rates provided. There could be large discrepancies which could ultimately affect the profitability of your business. 

Now, imagine that everything went as planned with the working capital loan approved. How do you ensure your business loan is spent effectively, generating the greatest returns for your business?

Build a Safety Net with your Business Loan

Allocate a portion of the business loan received as emergency funds. With looming uncertainties surrounding the business ecosystem, this safety net could act as a buffer during an emergency, or it could contribute to your bank balance which increases the likelihood of you getting an approval when you apply for working capital loans. Debt providers would feel more assured when the bank balance is sufficient as it shows your business provides them with the confidence that repayments could be done.  

Set Up Automatic Loan Repayments

Late or missed repayments are costly, adversely affecting your business credit score. An auto-debit helps manage your business loan repayment by saving your time and preventing late charges, improving efficiency, making it a win-win situation!

Tranching of Funds

It is common for businesses to seek for a loan quantum that is larger than what’s required. To them, this eases the application process which can be tedious and time consuming. Speak to your debt provider to see if they can provide working capital loans in tranches. This allows you to drawdown multiple times, saving your business expenditure on interest payments.

Conduct Budgeting Before Applying for a Business Loan

It is essential to calculate monetary needs and set appropriate budgets prior to business loan applications. This is especially important when it comes to working capital requirements. SMEs often struggle to plan with their limited resources. Besides, SMEs overlooking business priorities can also bring detrimental consequences. Budgeting provides the business owner a clearer perspective on cash flow, reducing costs, and improving business profitability. 

Utilize your Free Cash

As your business scales with positive returns, your bank balance will increase. Depending on the business’s future prospect, it could be ideal to retire some loans. However, keep in mind some financial institutions would impose charges on early payment. Conduct a cost benefit analysis before making such decisions.

Overall, acquiring a business loan can be financially beneficial for your business. It allows your business operations to run smoothly, especially during times of financial strain. It is also essential to always ensure your business has a healthy credit score to increase the probability of obtaining financing.  Click here to find out how your credit score helps you raise working capital and manage risk.

For more information, do reach out to us at support@lytefinance.com for a chat!

Are you a startup founder looking for startup loans in Singapore?

One of the biggest challenges for SMEs is securing working capital financing. There are many types of financing options readily available in the market, usually categorized into three groups – debt, equity or grants.

We will be breaking down the more commonly used debt instruments below, and briefly cover the grant and equity options as well.

1. Invoice Financing

Invoice financing is a debt instrument pegged to a value portion of an invoice. It will benefit businesses with clear-cut business transactions (hardware supply, services provider) that have long credit terms. Businesses can utilize advanced capital to shorten cash cycle and reduce stress on working capital. 

There are two forms of invoice financing

a) Purchase Order Financing

Purchase Order financing involves financing the supply side of the value chain. For example, Superstar Hardware Pte Ltd received a Purchase Order from All Goods Hypermart Pte Ltd for a total of 5 fridges and went ahead to place an order to purchase the 5 fridges from Supercold Fridges Pte Ltd. Then, a Purchase Order financier would pay Supercold Fridges on behalf of Superstar Hardware.

b) Receivables Financing

In contrast, receivables financing involves advancing outstanding payments from debtors whereby work contracted for has been completed. For instance, Superstar Hardware Pte Ltd successfully delivered all the fridges to All Goods Hypermart Pte Ltd and is awaiting payment under a credit term of 60 days. Then, a receivables financier would come in and pay Superstar Hardware on behalf of All Goods Hypermart.

2. Working Capital Loans

Working capital loans typically have a termed (monthly) or bullet (single) repayment arrangement. Financiers tend to look at the strength of the cashflow, financials and key ratios of a business seeking financing. Frequently, businesses take up working capital loan is to support their day-to-day operation requirements.

3. Project Financing

Project financing is a more bespoke debt instrument where a financier will provide capital in tranches based on a project’s milestones or requirements. It relies heavily on the record of accomplishment of the business executing the project. This is because most financiers are reluctant to finance business with a lack of references. When the business has a healthy track record for completing projects, debt financiers are more likely to extend this kind of instrument. 

Project financing benefits businesses that generate revenue from project execution (constructions sector as an example) with complex terms and milestones. This form of financing provides massive relief to businesses, freeing much needed cashflows to pursue aggressive growth. 

4. Grants

Next, grants are funds given by public body or government entities for various purposes to benefit the economy or public. Usually businesses that are not yet revenue generating benefit most as repayments are not required. They can utilize grants to hire additional talent, build products, and/or to fund research and development activities.

5. Venture Capital

Lastly, in venture capital financing businesses choose to sell a portion of ownership of their company in exchange for capital to fund their growth. Generally speaking, it is usually available to businesses that have hypergrowth potential and a clear path to an exit (an opportunity where financiers can sell their equity at a higher price for return). However, venture capital is not suitable for all businesses. It benefits companies with hyperscale potential that are capital intensive (usually much more than the revenue they can generate in the early days) to scale. 

Closing Thoughts

While working capital loans are suitable for almost every company, ranging from project financing to invoice financing, each financing option comes with pros and cons. Thus, understanding the type of financing available in each category is important as it helps business owners in sourcing for capital more efficiently (avoid barking up the wrong tree). 

For a more in-depth discussion on all the above and more, reach out to us at support@lytefinance.com! Happy to have a chat on the the startup loans available for your business in Singapore!

Read to find out more about SME Working Capital Loans in Singapore.

Since the announcement of the Temporary Bridging Loan for SMEs extension to March 2022, I thought this would be good timing to share methods on how you can increase your chances of obtaining a working capital loan. 

At the start of the Covid-19 pandemic, government support through participating financial institutions (“FI”) eased the burden of SMEs. While many companies received this support, a large number of SMEs did not get the aid they were looking for. Ultimately, the participating FI makes its lending decisions based off their lending parameters.

Before you apply for the Temporary Bridging Loan, here are some tips that can possibly help reduce waiting time and uncertainty. 

1. Purpose of the loan:

The purpose of the loan should be as specific as possible. Try to get into the details to help lenders understand that the requirement is genuine and that the money will help propel the business forward. 

For example, you need working capital to purchase goods worth $100. You are making this purchase to service an order from an existing client. 

2. Presentation of financial documents:

It is really important to have your financial documents prepared and well presented. Lenders appreciate and find it helpful to have your reconciliation up to date to a current and accurate picture of your company’s financial standing.

3. Plans moving forward:

In the same way investors want you to pitch about your company’s future, lenders are equally interested in where the company is going over the next year or two. These plans should be realistic and backed by numbers. 

By providing lenders with a realistic roadmap, you can assure them that you will have the means to pay on time for the duration of the loan.

You can do this, for example, by sharing new contracts you have obtained, how this new contract will increase revenue, how it will impact operating expenses, and ultimately how this impacts your profitability.

It would be helpful to lay out your plans in the following format:

• Revenue – What is the potential outcome of your new contract? Conversely, if Covid-19 has a negative impact on your business, what are your plans to ride this down trend?

• Gross Profit Margin – As obvious as this sounds, your cost of goods should not exceed your revenue.

• Expenses – What does an additional contract mean for your business? Would you have to hire additional headcount? How would it ultimately affect your profitability? Conversely, if your business is severely impacted by Covid-19, what are your plans to reduce expenses and to remain profitable? If you are expected to make losses, what are your plans to stay afloat? For example, we have seen travel companies pivoting to conducting virtual tours. Share these plans with your lenders to get them comfortable with putting money on the table. 

I hope you find this narrative interesting to you. If there are topics you would like us to cover or if you would like to learn more about SME Working Capital Loans in Singapore, feel free to drop us a message at support@lytefinance.com.

This article aims to help you understand more about the importance of a Business Credit Report.

Raising Capital

Unless your company is flushed with cash and you never have to worry about capital ever again, you’re probably faced with a common problem: getting money through the door is challenging and expensive. While skilled negotiation, an airtight business plan, and convincing managerial experience can take you far, there is another often overlooked tool in the fundraising toolbox that can be leveraged to take you even further: a strong credit score. 

When people think about credit scores, they think about individual credit scores. A person’s score has several useful and arguably necessary functions. For example, the score can determine what kind of loan you get and the rates you pay. It can also determine your insurance premium, how much you spend on your cell phone plan, and whether the landlord asks you to put down a one- or four-month security deposit. Your individual credit score, therefore, affects how much money you can access and whether you’re saving a bundle or getting hammered. In other words, with a good score people will find it easier to trust you.

Fortunately, the same credit score principles that apply to an individual can have the same impact on a company. If your company needs a working capital loan and your credit score is stellar, you’ll be able to get more cash at cheaper rates than if you couldn’t provide a score at all. If your company is looking to rent a larger space because you’re expanding, you can use your credit score to negotiate a better monthly rental and park less of your money in the security deposit. In other words, with a good score you will have more bargaining power and less cost.

Managing Risk

Raising capital is just one of the ways your credit score can be beneficial. Let’s say you run a coworking space, full of space for bright eyed startups who need are looking for a place to establish themselves. Some of them are well-run, some of them aren’t, which means that some of them pay on time and some of them may not. If you could get a quick health check on all your occupants, you’d know exactly who to talk to and who looks like they might be struggling and avoid potentially incurring bad debt. And for the companies who have great scores, you could consider offering a reduction on the security deposit to keep them happy with staying in your space. 

If your business is heavily dependent on certain players in your supply chain, having an eye on their financial health and getting their credit score can help you avert a major crisis by looking for alternatives before a portion of your network goes under. On the other hand, if these entities have strong scores, you can improve your relationship with them by providing them better terms. 

LyteScore

So how do you get a viable credit score? Simple, send us your financials and your AP/AR aging reports and we’ll churn out one Business Credit Report, according to your preference. We have two credit reports: “Lite” and “Essential”. “Lite” report is quick and easy: you’ll get your score and a breakdown of your financial metrics. If you need something more involved, our “Essential” report will give you everything the Lite report does, plus an in-depth analysis of your finances. You can apply insights gleaned from the report to tighten up areas of your business and/or use it as leverage when navigating a capital injection.  

To benefit from all of the above, e-mail support@lytescore.com.