There are few things as important as getting a background check on potential business partners before you begin working with them, whether they are customers, suppliers, employees, franchisees, or tenants. Doing so offers several benefits, including improved risk management and increased profits.
Mark Kohler, Author, Attorney and CPA, in his article for Entrepreneur.com “Everything You Need to Know About Business Partnerships”, wrote: “Obviously, only go into business with those you trust. Vet everyone in your business dealings, whether it be a contractor, a tenant, etc. This could mean conducting background checks and calling personal references. This is especially true with your business partner(s) and is by far the most important way to protect yourself when entering a partnership.”
But, once you decide to conduct a credit check on your potential business partner, how do you ensure you get the most valuable information possible?
By taking these three steps you not only ensure that your credit report is in-depth and insightful, you can also help speed up the process.
1. Request the Right Reports
There is no ‘one report fits all’ approach to credit reporting. While there is some cross over, each industry, applicant and situation requires a specific set of information and a different set of reports. Taking the time to discuss your needs and outcomes with your credit reporting agency can ensure that the reports you need are provided - the first time.
Experienced agencies will be able to provide you with a listing of reports and information based on your situation, ensuring you get the information you need to make the best decision possible.
2. Ensure Your Credit Application Is Thorough and Complete
When requesting a commercial credit report, it is important that you gather as much information as possible from the applicant to ensure a thorough investigation can be conducted. While many agencies will simply do a database search, others will provide real-time, current and up-to-date information, which helps you to avoid purchasing historical and outdated data. As a result, the more information you gather from the source, the easier it will be to conduct the search.
In most cases, the agency you decide to work with will provide you with an application form that that will gather all the information needed to conduct your search. Being certain that each section of the application is filled out completely is critical to ensuring your background check is thorough, insightful and timely.
If pertinent information is missing, this could result in delays, numerous back-and-forths or even an inability to find information.
3. Study the Results
Once you have conducted a credit check on your potential business partner, it is time to analyze the results. While it can seem easy to take the information at face value, sometimes there are patterns or relationships within the report that can be signs of future problems.
At QCR, we make it our mission to provide easy to read reports that help you make the right decision. We will provide guidance on what specific information means and highlight the details that require additional consideration.
For more information on Commercial Credit Reports, contact us today. We are always happy to help.
Tags: Business Credit Reports
