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How to build business credit

by OnDeck Australia,   May 23, 2023

Establishing a strong business credit profile is vital for the success and growth of any company in Australia. Just like individuals have personal credit scores, businesses have their own credit profiles that lenders and suppliers use to evaluate their creditworthiness. In this guide, we will explore what business credit is and provide you with a step-by-step approach to building and maintaining a solid credit foundation specifically tailored for Australian businesses. We will also highlight how OnDeck, the passionately small lender, can help Australian businesses discover their credit score and unlock the funding they need. 


Understanding Business Credit in Australia: 

Business credit in Australia refers to a company’s ability to access financing and trade credit based on its creditworthiness. It is separate from personal credit and is evaluated based on factors such as the business’s financial history, payment behavior, and industry risk. Building strong business credit allows Australian companies to secure favorable financing terms, establish credibility with suppliers, and gain access to essential funding. 


Separate Your Business and Personal Finances: 

To begin building business credit, it’s crucial to establish a clear separation between your personal and business finances. Open a business bank account and obtain a dedicated business phone line. Keep distinct financial records for your company to maintain a clear distinction between personal and business liabilities. 


Register Your Business: 

Formally register your business as a legal entity in Australia. Depending on your company’s structure, this may involve registering as a sole trader, partnership, company, or trust. Registering your business not only lends credibility but also allows you to build credit under your business’s name and Australian Business Number (ABN). 


Obtain an Australian Business Credit Score: 

In Australia, credit reporting agencies such as Equifax and Experian provide credit reports and credit scores for businesses. These scores reflect a company’s creditworthiness and are used by lenders and suppliers to assess the risk of doing business. OnDeck can help Australian businesses discover their credit score quickly and easily, providing valuable insights into their credit health. 


Establish Trade Credit Relationships: 

Start building your business credit by establishing trade credit relationships with suppliers who report payment history to credit bureaus. Make timely payments and gradually expand your network of vendors who can vouch for your payment reliability. Positive trade credit references are crucial for building a strong credit history in Australia. 


Monitor and Manage Your Credit: 

Regularly review your business credit reports from Australian credit reporting agencies. Ensure the information is accurate and report any discrepancies promptly. Managing your credit responsibly and maintaining a good credit utilization ratio will positively impact your credit score. 


Utilise Business Credit Facilities: 

Apply for a business credit card or a small business loan to demonstrate your ability to manage credit responsibly. Use these facilities wisely, making timely payments and keeping credit utilisation low. Responsible utilisation of business credit facilities can enhance your credit profile in Australia. 


Build Strong Relationships with Australian Lenders: 

Developing positive relationships with Australian lenders is essential. Timely payments and responsible credit management will earn you the trust of lenders, enabling you to access better credit terms and financing options. 


OnDeck’s ‘Know Your Score’ Tool: 

OnDeck, the passionately small lender in Australia, understands the unique needs of Australian businesses. This lead to the creation of the ‘Know Your Score’ tool, allowing small business owners to instantly check their business credit score free of charge. Check your credit score instantly, or find out more about know your score here. 


Building strong business credit is a key step in securing the financial success of your Australian business. By following these step-by-step guidelines and leveraging the expertise of lenders like OnDeck, you can establish a solid credit foundation and unlock the funding you need to fuel your growth and achieve your business goals. Remember, diligent credit management and responsible borrowing are essential for long-term financial 


Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at May 2023. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.

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