Access to finance refers to the possibility that individuals or enterprises can access financial services, including credit, deposit, payment, insurance, and other risk management services. Those who involuntarily have no or only limited access to financial services are referred to as the unbanked or underbanked, respectively.
Among common financing challenges faced by SME are:
- Incomplete document
- Financial records not up to date
- Weak in financial management and discipline
- Lack of business succession plan
- Unsatisfactory business conditions
- Repayment capability
Accumulated evidence has shown that financial access provides credit for the most promising firms promotes growth for enterprises through the provision of credit in the most promising firms, encourages more start-ups, and enables incumbent firms to grow by exploiting growth and investment opportunities.
However, little know of what the best way are to establish credit and keep a good credit score. Some of those are:
- Start banking early i.e. when you start your business.
- Ensure all collection and payment via banking facilities
- Embark on e-payment
- Ensure adoption of Accounting software for prudent trail
- Do not mix personal and business transaction
- Ensure all regular payment perform via Standing Instruction for prompt transaction.
- Obtain credit lines that are easier to manage i.e. simple term loan / overdraft when it starts.
- Spent time in managing finance
- Always ensure proper business and financial conduct within limit
- Update business and financial record on timely basis
- Engage licenced accountant for business and financial advisory.
You may not be ready now, but if you decide to be in different situation in years to come. You might want to take those advice. All the best