The Importance of a Credit Report

When it comes to selling off your business there are few things that are more important to the process than conducting a credit report. Why do you need to do this and what can it bring to a business sale?

At RTA Business Consultants, one of the country’s leading business acquisition services, we recognise that confidence is key on both sides when you are selling a business. You have to be confident that a buyer has the funds to go through with the purchase and they have to have the confidence that your business will benefit them financially.

This is why you should not only carry out a credit report on your own company, but on theirs too. A credit report is a report that you can obtain which details your credit history. It details accounts, loans, missed payments, jointly held financial agreements, publicly available financial records etc. Normally they are used to ascertain how likely a company is to uphold financial agreements.

There are several services that provide a credit report. Prices for such a service often vary, but usually it clocks in at around £15. However depending on the price the level of service you are provided varies. Look around and conduct some internet researching to find the service that most suits your needs.

It’s easy to see you would want to request a credit report for a potential buyer of your business. You are depending on the buyer to uphold their end of the bargain and a credit report tells you whether they have a history of doing so or not. It provides security and shows that they are trustworthy. It’s insurance.

However it’s not always  so easy to see why when you are selling your business you would conduct a credit report on the business itself, as you might not have a perfect credit history, which is common for small businesses as they’ve gotten started.

However you have to think about it from the buyer’s perspective. They know that no business is perfect and they don’t want to be lied to. Providing a credit report shows them the true state of the business and shows them that you re honest and that they know what they’re buying.

At RTA Business we recognise that when you are selling your business you need to be prepared. Investing in credit report means that you know what you are dealing with and how to proceed.